People think using contingent workers is a down and dirty way to save money, says attorney Nancy M. Cooper, but there are expensive pitfalls that could erase that savings many fold. In today’s Advisor, Cooper demystifies part-timers and temps.
Cooper chairs the labor and employment practice group at law firm Garvey Schubert Barer in Portland, Oregon. Her tips came at a recent BLR-sponsored webinar.
Technically, What’s a Part-Timer?
Regular part-time employees are workers who are normally scheduled to work fewer than 40 hours per week and who are not designated to receive the typical fringe benefits that full-time workers receive, says Cooper. For some of Cooper’s clients, full-time is 30 hours a week or more. You can set the number for your company. Part time is anything less.
It’s important to understand “normally scheduled,” says Cooper. Part-time employees may occasionally work more hours, even full-time hours, but that doesn’t make them regular employees.
Temporary employees are workers hired on a temporary basis for a special job and/or set period of time. They are recruited and compensated by a temporary employment agency or a professional employer organization (PEO)—you pay the temp agency or PEO, which in turn pays the temps it employs.
You can hire temporary workers yourself “off the street,” Cooper says, but that means you have to do all the bookkeeping and recordkeeping yourself.
How long can a person be a temp? There is no magic number, Cooper says and case law is all over the board. But generally she would say that over 6 months it is hard to call someone a temp unless there is a very specific, say, 9-month project with little likelihood of continuation.
Leased employees are similar to temporary workers, except they are generally provided to you on an open-ended basis (while temp workers are usually supplied on a short-term basis). They are typically used when the employer doesn’t want to deal with administration and payroll and all that stuff, Cooper says.
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Interns are a different breed of cat, Cooper says. They are individuals receiving training (under close supervision in your workplace) that primarily benefits them (not you as the employer) and that advances their skills. This training time may be paid or unpaid. The key is that the experiences generally benefit them.
You also may hear the term, “contingent workers,” says Cooper. That’s a catch-all phrase that may include some or all of the above categories.
Volunteers—One of the Biggest Traps
“My friend knows you’re in trouble and wants to volunteer and come in and help.” “I’ll just stay late on a volunteer basis.” No, you can’t allow that in a for-profit business, says Cooper.
Volunteers are individuals who donate their time to work (for religious, charitable, or humanitarian reasons) for nonprofit groups or state and local public agencies. Period, end of sentence, says Cooper. There is no provision for a for-profit business to have volunteers.
If you are a non-profit, and an employee wants to volunteer, you need to be sure that work he or she does is different from the normal job and is not displacing a paid worker.
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Joint Employer Status—A Huge Legal Threat
Perhaps the greatest legal threat from your use of contingent workers is the specter of “joint employer” status, says Cooper.
At first glance, temporary and leased workers employed by a staffing agency or leasing company are the legal responsibility of that agency or company. In some circumstances, however, you could be held equally liable for those workers as a “joint employer” alongside the staffing agency or leasing company.
This means that both employers (your organization and the staffing agency/leasing company) are fully liable for any legal violations. For example, if the employee leasing company doesn’t follow wage and hour rules or maintain required records, you could be on the hook for its mistakes. You and the agency are both responsible for ensuring that temps are covered by workers’ comp and wage/hour standards and that they have an I-9, W-4, and Social Security number on file. You also need to be sure that the agency has not improperly classified employees as exempt under FLSA rules when they shouldn’t be.
If an agency worker files a claim of discrimination, even though the person is employed by other agency, if the harassment happened on your premises, you will have joint liability.
Therefore, when selecting an agency or employee leasing company, make sure to get copies of the company’s written policies. Read your agreement carefully to see where liability may lie and to see who is indemnifying whom if there are problems. Then take steps to verify that temporary employees are properly paid and receive accurate wage statements.
In tomorrow’s Advisor, Coopers’s tips for avoiding part-timer lawsuits, plus an introduction to the 50×50, the handy all-in-one compendium of state laws for HR managers.
With the DOL on the wage and hour warpath, it’s hard to believe a company would be foolish enough to use “volunteer” workers. Talk about asking for trouble!
Our Professional Employment Organization (PEO) does not provide temporary workers to our clients, but instead has engaged in a co-employment relationship to act as the Administrative Employer. We do not make any employment decisions, however we do provide HR services that include initial steps in recruiting, employee relations counseling, and advice in all HR related areas. The ultimate decision making remains with the worksite employer. I have never heard of PEO’s providing temporary workers.