Sure, She Works Here. But, Do We Employ Her?

Consider the following situation: You hired a worker through a staffing agency. He or she works in your place of business. But, is he or she your employee? How do you know? Today, attorney Deanna Brinkerhoff helps us understand this tricky situation.

Brinkerhoff, an associate in the Las Vegas office of law firm Holland & Hart LLP, offered her tips at BLR’s Advanced Employment Issues Symposium, held recently in Las Vegas.

Recent Joint-Employer Test—National Labor Relations Board

The August 2015 Browning-Ferris ruling brought a new, broader joint-employer test:

  • Is there a common-law employment relationship?
  • Does the purported joint employer have the authority to exercise control over the terms and conditions of employment? (Note: The purported joint employer need not actually exercise that control, says Brinkerhoff.)

Essential terms and conditions can include:

  • Hiring;
  • Rejecting new hires;
  • Training;
  • Discipline;
  • Setting pay and benefits;
  • Establishing working conditions;
  • Firing or demanding firing of workers;
  • Assigning tasks; and
  • Providing oversight or evaluations.

Bottom line, if the staffing agency and client share responsibility, or the client retains the right to exercise control over these terms and conditions, a joint-employment relationship exists, Brinkerhoff says.

As a joint employer, check to be sure who is taking care of obligations that are related to:

  • Form I-9 and employment verification
  • Wage-and-hour laws
  • Title VII and discrimination laws
  • Laws pertaining to the Family and Medical Leave Act
  • Laws pertaining to the National Labor Relations Act
  • Workers’ compensation
  • The Occupational Safety and Health Administration

Brinkerhoff’s Best Practices for Avoiding Liability Related to Contingent Workers

Brinkerhoff offers the following tips for avoiding liability:

Independent contractors:

  • Make educated and realistic determinations to determine if an individual is an employee or not.
  • Use contracts that specify the employment relationship and the factors of that relationship.
  • If you want or need to exert more control or to have a long-term relationship, consider converting the independent contractor into an employee.

Staffing and temp agencies:

  • Choose the agency wisely—vet its knowledge and compliance with employment laws.
  • Research the agency’s track record of violations, complaints, lawsuits, etc.
  • Check references of the agency and determine if it belongs to associations or other HR-related groups that keep them up to date.
  • Use of a written agreement will help protect against joint employer status.
  • Identify that the agency is the sole employer and that no joint-employer relationship exists.
  • Do not retain authority over essential terms and conditions of employment.
  • Establish production requirements and quality control via nonemployer methods (e.g., inspection of product rather than oversight of daily duties).
  • Do not engage in typical employer conduct, that is:
    • Do not participate in interviews, testing, hiring decisions, discipline, terminations, etc.
    • Do not pay, approve raises, or provide bonuses or benefits.
    • Avoid assigning and supervising work.
    • Do not keep personnel files on nonemployees.

The exact nature of an employee hired from an employment agency is just one of your many concerns. Recruiting and HR Management are diverse fields, with diverse problems and solutions.

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