Learning & Development, Recruiting

Temporary Staffing Agency's Mistake Causes Trouble for Employer

Employers throughout Massachusetts use temporary staffing agencies to fill vacant, temporary, per diem, seasonal, and other positions. Those staffing agencies must comply with certain laws, including Massachusetts General Law Ch. 149, § 159C.staffing
That law, which was amended in 2012, requires a staffing agency to provide workers written notice of the agency’s name, its workers’ compensation carrier, the name of the worksite employer, and a description of the job to which the worker is being assigned. Further, the law allows temporary staffing agencies to charge a fee for transporting workers to the jobsite, but the fee cannot exceed 3% of the employees’ daily pay.
But what happens when the temporary agency isn’t complying with the law? Can the employer be liable? In a recent case, a superior court says yes.

Staffing Agency Makes a Mistake

“Pamela” was employed by Job Done LLC, a temporary staffing agency, to perform work for Fulfillment America (FA). According to Pamela, Job Done provided transportation to and from FA’s facility and charged employees $4 per round-trip. FA didn’t charge the employees for transportation. Pamela filed a lawsuit on behalf of herself and other employees working for Job Done and FA, alleging the $4 fee was more than 3% of their daily pay.
FA asked the court to dismiss the claims against it because it hadn’t charged the fee. According to FA, when Job Done charged employees the transportation fee, it wasn’t acting in FA’s interest, either directly or indirectly.

And Joint Employment Hurts Another Massachusetts Employer

The court denied FA’s request to dismiss the case without a trial. In making that ruling, the court noted that a jury could conclude Job Done was acting—either directly or indirectly—in FA’s interests when it transported employees to FA’s facility and the companies were therefore joint employers of the employees.
Unless it settles, the case will proceed to trial against Job Done and FA. At that point, a jury will decide if FA must pay damages to Pamela and the other employees as a result of Job Done’s wrongdoing. Palacio v. Job Done LLC (Massachusetts Superior Court, 2018).

Bottom Line

If you use a temporary staffing agency to fill jobs, you could be liable for its improper pay practices or failure to comply with other employment laws. So what can you do to minimize that risk? Work with a reputable staffing agency, and confirm that it complies with all state, federal, and local laws applicable to employees. That means that before you engage a staffing agency, you need to ask important questions about its compliance with specific laws.
And once you’ve selected a staffing agency, make sure your contract includes language to protect you, including an indemnification clause requiring the agency to defend, indemnify, and hold your business harmless for any claims you incur because of the staffing agency.
Amelia J. Holstrom is an associate at the firm of Skoler, Abbott & Presser, P.C., and editor of Massachusetts Employment Law Letter. She can be reached at 413-737-4753 or AHolstrom@skoler-abbott.com.