As use of temp workers rises, so do litigation risks

Employment attorney Patricia Nemeth of Detroit-based employment law firm Nemeth Burwell PC says the trend toward hiring more temporary workers ("temps") does not preclude hiring companies from following sound employment practices and taking steps up front to avoid employment disputes.

"Temporary workers can be a good solution to meet immediate and even longer term hiring needs, but companies that hire temps may unknowingly be entering into a joint employer relationship. Because of that, hiring companies need to follow sound employment practices for temps just as they do for those who are traditionally employed," says Nemeth, whose firm represents both staffing companies and companies who hire temporary workers.

Nemeth notes it can be tricky for hiring companies to know how to differentiate between their responsibilities as an employer and that of an entity that has entered into a contract to purchase a service which, in this case, is temporary staffing help.

"Temps are not regular employees in the traditional sense, but in many ways they act like them and are held to the same standards. For example, temps often wear the same employee uniforms, use the same computer swipe cards, have the same hours of work and are subject to the same work rules. Yet temps are often not required to sign off on policies or procedures specific to the hiring company where they are assigned," explains Nemeth. "At the same time, the temps may or may not have received an employee handbook from the staffing company that is placing them on assignment."

Nemeth says problems can arise when the hiring company is not aware of what documents the temp has signed at the staffing company and generally does not require the temp to sign off on or receive any policies, procedures or rules specific to the hiring company's employment practices. For instance, if the temp alleges s/he has been the subject of sexual harassment, what policy or procedure is in place for the temp to follow? Has the temp been notified as to whom s/he should report the sexual harassment?

"These are questions that need to be answered," says Nemeth. "The hiring company needs to understand the rules and procedures the staffing company has in place for its workers, just as the temp needs to know the rules and procedures of the hiring company's workplace."

Based on her experience, Nemeth cautions that temps tend to have less loyalty to the hiring company than traditional hires and can be more litigious.

"When a temp sues a staffing company, the hiring company is frequently brought into the lawsuit as well. This is especially true in a wage and hour case, or cases where discrimination or harassment are alleged at an administrative agency (like the EEOC or MDCR) or in court. When a person has been let go from an assignment and has not been placed in another assignment, the potential for litigation also increases."

Problems can be avoided or mitigated when the hiring company and staffing company understand and enter into a contract clearly defining their roles and responsibilities well in advance of the relationship's first temporary hire.

"As companies ramp up post-recession and need to start fulfilling orders and new contracts quickly, there can be a rush to hire a wave of temporary workers to get the job done without consideration to the legal implications involved. The danger of miscommunication occurs when contracts between the hiring company and the staffing company are overlooked or were never prepared in the first place," says Nemeth.

"Both companies need to discuss beforehand how potential issues will be addressed so that a policy or procedure is not finalized in the midst of a chaotic situation. Further, there needs to be ongoing, productive communication between the hiring company and the staffing company throughout the course of the placement and re-assignment of a temporary worker."

Nemeth also recommends that hiring companies consider a separate, less intensive onboarding process for new temporary workers to acclimate them to the company and its culture, expectations and work rules.

Published: Tue, Aug 21, 2012