Everyone has New Year’s Resolutions. Except me. My wife asks me every year, and every year I politely decline. She doesn’t like when I do that.
Some people pledge to lose weight, to get skinnier. This post is about getting skinny with your handbook for 2025—just for temps.
Do you provide your employee handbook to staffing agency temps? Should you?
Generally, I would say no, you should not. The handbook is filled with information about benefits that apply only to your direct employees, not temps. The handbook also probably directs and controls what your workers do, in ways that could make you a joint employer.
Instead, consider rolling out a skinny handbook just for temps.
There are a few polices that should apply to staffing agency temps, and it’s to your benefit to make clear—in writing— that these policies apply. It can be about 6-8 pages. That’s all you need.
Outline for Handbook for Temps
1) Equal Employment Opportunity
Anti-Discrimination
Anti-Harassment
Complaint Procedure
No Retaliation
2) Site Safety
Drug and alcohol
Weapons
Workplace Threats and Violence
Accidents, Emergencies, Reporting of Injuries
Searches, Screening
That’s it. You can include a welcome message too if you’d like. Maybe add a call-off procedure. Check whether references to “employees” should be changed to “workers” or something similar that doesn’t sound like you are conceding joint employer status.
Creating a skinny handbook for temps should take no more than 2-3 hours. If you want to start the year with a quick accomplishment that will add value, this is a good one. And you can even claim it as your New Year’s Resolution.
Teacher, don’t you fill me up with your rules (fn1)
Brownsville Station was a rock band formed in Ann Arbor in 1969. (Go Blue!) Their biggest hit, Smokin’ in the Boys Room, reached #3 on the Billboard charts and was later covered by Motley Crue. The song was Motley Crue’s first Top 40 hit. Apparently LeeAnn Rimes covered the song too in an album called Nashville Outlaws: A Tribute to Motley Crue, which is I guess was her tribute to a tribute to Brownsville Station.
Business groups in New Jersey and Illinois have also been pleading don’t you fill me up with your rules – in particular, rules related to the use of temp workers.
As discussed here and here, these two states passed temporarily worker laws that required temps to be paid wages and benefits equivalent to the regular workers they are supplementing.
Those rules are both in effect, but there are still several moving parts you should know about.
In Illinois, a judge struck down the portion of the law that required payment of equivalent benefits, ruling that this portion of the law was preempted by ERISA. Illinois lawmakers are now considering options to amend the law to require the payment of the value of benefits, if not the benefits themselves.
In New Jersey, the law took effect, but there’s an active lawsuit in which staffing and other business groups have challenged the law. The case is pending. New Jersey Staffing Alliance et al. v. Fais et al., No. 1:23-cv-02494, D. N.J.
For now, these two temporary work laws remain in effect, except for the benefits aspect of the Illinois law. But the situation remains fluid. It also would not be surprising if other states enacted similar laws. Companies using temp labor should continue to monitor these developments.
fn1 – Everybody knows that smokin’ ain’t allowed in school.
Five fisherman from Sri Lanka died last month after drinking the unknown liquid they found in bottles floating about 300 miles offshore. The fisherman reportedly believed the bottles contained foreign liquor.
Ceylon Todayreports that efforts are underway to inform nearby fishing trawlers about the dangers of drinking from floating bottles. It’s a good thing the authorities are doing that because, otherwise, the most common sense thing to do when finding unidentified liquids is to drink them.
Better planning would have saved their lives. You can also plan better when negotiating your staffing agency agreements. Here’s a clause you can include that won’t save lives but will save money.
Overtime Multiplier Caps
When a non-exempt temp works more than 40 hours in a week, the worker must receive overtime pay of 1.5x. But that doesn’t mean you need to pay the same markup rate to the agency for that extra .5x premium.
Here’s what you can do instead.
Suppose you pay a 40% markup on the hourly rate the agency pays to its workers. For a worker receiving $10/hour, you pay the agency $14, The agency gets $4 in revenue for one hour of work provided.
But suppose the same worker works 50 hours in a week. The extra ten hours are paid to the worker at $15/hour, which means the agency gets $6 in revenue for those hours. Here’s the math: 15 x 1.4 = $21, less the $15 that goes back to the worker = $6.
Why should the agency get $6 instead of $4 for the same hour worked? It’s a windfall. You can cap that with an Overtime Multiplier Clause.
The clause would say, essentially, that for straight time, the agency gets a 40% premium. For overtime hours, the markup is the same 40% on the straight time (the 1.0x), then the overtime premium (the extra 0.5x) is reimbursed with no markup on the premiums portion of the pay (the 0.5x).
The worker gets $15, but you pay the agency $19 for that hour, not $21.
In future posts, I’ll address other money-saving clauses you can add to your staffing agency agreements.
In the meantime, remember not to drink from any bottles you may find floating at sea.
In 1995, a man robbed two Pittsburgh banks during the day. He wore no disguise and was easily identified by surveillance cameras and arrested. This surprised the man.
The man was surprised because he had covered himself in lemon juice, and he believed that lemon juice made him invisible to video cameras. Obviously, it doesn’t and it didn’t. Lemon juice does not prevent a person from being seen.
Now let’s talk about staffing agency temps and being seen. If your temps are integrated into your workforce, there is a high likelihood you are a joint employer.
If your staffing agency temp improperly pays your temp, and the temp files a wage and hour claim, you can’t just drench yourself in lemon juice and hope not to be seen. Chances are, you’ll be sued too.
If you are a joint employer, you are likely liable for wage and hour violations by the staffing agency, even though you had no control over the staffing agency‘s pay practices. For liability purposes, their mistake is your mistake.
One of the best ways to avoid getting drawn into a class action filed by an agency temp is to require, in your staffing agency agreements, that all temps sign an individual arbitration agreement. All temps should be required, as a condition of being placed at your company, to agree that any claims they have against your company will be resolved in arbitration, on an individual basis, not through a class action.
How do you do this? In three parts.
First, insert in your staffing agency agreement a clause requiring that all temps placed at your facility must first signed an arbitration agreement, a copy of which will be attached to the staffing agency agreement.
Second, draft the individual arbitration agreement exactly the way you want it, and attach it to the staffing agency agreement as an exhibit. Include a class waiver. Consider allowing small claims to be carved out and resolved in small claims court. Consider omitting AAA or JAMS as a designated arbitration administrator, to reduce the risk of mass arbitration filings. You can require arbitration without designating any agency to administer it. The agencies charge high fees, which creates the leverage that makes mass arbitration an effective tool of the plaintiffs’ bar. No arbitration agency = no administrative fees = probably no mass arbitration.
Third, require the agency to maintain copies of these agreements. You want the ability to audit compliance. You can also require the agency to show you a copy of each signed agreement before each temp begins an assignment.
It is frustrating to think that your business could be jointly liable for wage and hour violations by a staffing agency when you have no control over how they pay their employees. But with joint employment, that risk is a reality. You need to prepare for that possibility well in advance.
The staffing agency agreement provides you an ideal opportunity to plan ahead and protect yourself against this possibility.
Lemon juice might be a nice addition to iced tea, but it does not provide any protection against security cameras or class action lawsuits. You’ll need arbitration agreements for that.
Click here for more tips about what should be in your staffing agency agreements.
Not a hawk, but I like this picture I took in Utah a couple years ago
A woman in Texas was mowing her lawn last month when she was suddenly attacked by a snake and a hawk — at the same time. The hawk had been carrying the snake but dropped it. It landed on poor Peggy Jones. The snake wrapped itself around her arm. Still hungry, the hawk dove at Peggy to retrieve its tasty treat, clawing at her and the snake, and ripping up her arm in the process. Eventually the hawk won and flew off with the snake. Peggy had severe cuts and bruises, and her husband had to finish mowing the lawn.
We’ve got another double attack to report, this one in the world of temporary staffing.
Last week we wrote about New Jersey’s new temporary staffing law, which imposes new burdens on companies using temp staffing. Not wanting to be left out of the fun, Illinois has followed suit with a similar law.
The Illinois law imposes several new burdens on companies using temp staffing workers.
I’ve listed those obligations here, on the BakerHostetler Employment Law Spotlight blog. I list eight things that companies in Illinois will need to know.
I haven’t yet decided which law is the hawk and which is the snake. But both will inflict some pain.
Meanwhile, enjoy this song called Snake Hawk, by The Budos Band.
I like riddles. How could you not? Here are two. Answers are at the bottom of the post:
1. What has to be broken before you can use it? 2. I’m tall when I’m young, and I’m short when I’m old. What am I?
Getting back to business, here’s a question I have been asked many times. It seems a bit like a riddle, with no clear answer and requiring careful thought. But I’m going to declare No Riddle. That’s because I think there’s a straightforward answer, and it might not be what you were thinking.
Here’s the question (in case you are among the 0% of today’s readers who skipped this post’s headline):
Should we cap a temp’s assignment at 6 months? 12 months?
To answer today’s question, I’m going to have to ask you two questions. (Sorry, that’s how we play this game.)
Question 1: As temps, my assumption is that they are intermingled with the company’s employee workforce, doing the same thing as employees, working side by side with employees, and reporting to the company’s supervisors. Is that accurate?
Question 2: Are they employed by a staffing agency and treated by that staffing agency as its W2 employees?
If you answered yes to both, then the amount of time temps are assigned to the company will almost certainly have no bearing on their status. They will be employees of the agency and probably also joint employees of the company. There are various joint employment tests, and we can go through them (fun!) but it would be largely an academic exercise.
From a practical business standpoint, we should assume that any time the answer to my two questions are yes, these two conclusions will follow:
First, The entity receiving the services is likely to be a joint employer under the FLSA, NLRA, anti-discrimination law, and state laws, regardless of whether the temp is assigned for five months or five years. When temps are intermingled with employees in a staff aug situation, there is very likely joint employment, regardless of which test is applied. Arguments could be made under some tests that there is no joint employment, but for purposes of trying to answer the question above in a practical business-oriented way, I would assume there’s going to be joint employment.
Second, joint employment in this scenario is a risk inherent in working with temp staffing agencies. But that’s not necessarily a problem. Joint employment is not unlawful and, with one exception, joint employment only becomes a problem if the staffing agency/primary employer fails to do something it is legally required to do, such as pay overtime or minimum wage. In that event, both companies would be jointly liable if there is a joint employment relationship.
The one exception is the NLRA. If the company is a joint employer, then the various protections of the NLRA start to cross over the temp employee and direct employee populations, such that if the agency workers were to organize, the company might have to bargain with them; or there could be a mixed unit; or if agency workers picketed the company, it would not be illegal secondary picketing.
So, if the answer to both of my questions is yes, then I would not be concerned with the duration of assignment. The company is very likely a joint employer already.
Some companies have a practice of not engaging temps for more than six months or year before deciding either they don’t fit or they should be hired directly. But there is no rule of thumb, and this sort of practice is often implemented based on the misunderstanding that capping a temp’s service time would reduce the risk of joint employment in a staff aug situation.
In reality, it’s unlikely to make any difference. In a staff aug situation, once you’re in the swimming pool of joint employment, you’re wet. It doesn’t matter if you’re on the top step or in the deep end. And once you’re a joint employer, you might as well exercise as much control as you want. You can embrace it at that point.
On the other hand, if you would answer no to either of my two questions, then limiting the duration of the assignment could be helpful in reducing the risk of independent contractor misclassification, especially if the workers are 1099 contractors.
If the answer to either of the questions is no, then we’d have to dive deeper into the facts to be able to say whether limiting the duration of the assignment would make any difference at all.
So, did you get the answer to the two riddles? Scroll down to see the answers.
As promised during the Master Class session last week, here are Ten Things That Should Be in Your Staffing Agency Agreements But Probably Aren’t.
There are still four Master Class sessions to go. The next one will be Tuesday at 2pm ET, covering the NLRB and the Uncertain State of Labor Law. There is no charge to participate. CLE and HR credits are available. You can register here.
What Companies Using Temps In New Jersey Need to Know
According to the National Constitution Center, there were 14 original copies of the Bill of Rights, with one sent to each of the 13 states and another kept by the federal government. The Center also reports, however, that four of the states — Georgia, Maryland, New York, and Pennsylvania — lost their copies. North Carolina’s was stolen by a Union soldier during the Civil War but recovered in 2002 through an FBI sting. (“Hey buddy, I’m lookin’ to buy a Bill of Rights. Ya know anyone?”)
New Jersey kept its copy, but also just added some new stuff. Sort of.
This month, New Jersey passed the Temporary Workers Bill of Rights. It’s less sweeping than the original 1791 Bill of Rights, but it co-opts the important sounding name to get everyone’s attention and to show constituents that the lawmakers are doing really important things that warrant re-election, financial support, the undying love of chatbots, etc.
The Temporary Workers’ Bill of Rights imposes new burdens on staffing agencies and the companies using temp workers. This post will focus on the obligations imposed by the companies using the temp workers.
Does the Bill apply to your industry?
The Bill applies to temp workers assigned by a temp staffing firm to work in any of the following industries, using Bureau of Labor Statistics (BLS) designations:
33-90000 Other Protective Service Workers
35-0000 Food Preparation and Serving Related Occupations
37-0000 Building and Grounds Cleaning and Maintenance Occupations
39-0000 Personal Care and Service Occupations
47-2060 Construction Laborers
47-30000 Helpers, Construction Trades
49-0000 Installation, Maintenance, and Repair Occupations
51-0000 Production Occupations
53-0000 Transportation and Material Moving Occupations
If you’re not in one of these industries, stop reading and get on with your day.
What obligations does the Bill impose on the users of temp labor?
1. Equal Pay. This sounds fair but may be problematic in practice. Temp workers must be paid “not less than the average rate of pay and average cost of benefits, or the cash equivalent thereof” of the user’s similarly situated employees.
I see two immediate problems here.
First, one of the benefits of using a staffing agency is the ability to pay the temps less until they prove themselves and earn an offer of direct hire. No longer. Now you’ll have to pay the same amount as you pay your regular workers, plus the markup.
Second, how is the staffing agency going to know the wages paid to your similarly situated regular workers and the value of the benefits package you provide them? Presumably you’ll have to tell the staffing agency.
But the staffing agency is not your confidant or fiduciary. It has multiple clients, probably including your competitors. Do you really want the staffing agency to know what your cost of insurance is, or what you pay your regular workers, or the full suite of benefits you offer? The staffing agency will have to adjust what it charges you — and your competitors — based on what each of its clients pay their similarly situated worker. That sounds like a pretty useful set of data for anyone wanting to know what competitors are doing.
You can (and should) designate this information as confidential when disclosing it to a staffing agency, and you should make sure your staffing agency agreement includes an obligation to protect confidential information. But is the information really that safe from prying eyes? If a competitor or temp worker is involved in litigation, couldn’t this information be subject to subpoena? Once you reveal this information, you lose a good bit of control over it.
2. Freedom to direct hire. Under the new law, temp workers must be free to accept offers of direct hire. Staffing agencies cannot restrict the workers’ ability to accept offers of direct hire. The agency can impose a “placement fee” on its client (you), but the amount is limited by statute.
The amount of the placement fee cannot exceed “the equivalent of the total daily commission rate the temporary help service firm would have received over a 60-day period, reduced by the equivalent of the daily commission rate the temporary help service firm would have received for each day the temporary laborer has performed work for the temporary help service firm in the preceding 12 months.”
For purposes of contracting, any provisions prohibiting direct hire for limited periods of time need to be removed. Instead, staffing contracts (in NJ, for these job classifications) should permit direct hire but may charge a permitted placement fee.
3. Reimbursement of tax obligations. The user of services is required to reimburse the temp agency for wages and “related payroll taxes.” Presumably this is already basked into the markup, but now it’s required.
4. Joint and several liability. The law imposes joint liability for any violations of the equal pay or direct hire provisions. Consider what that means for equal pay. You might have to disclose to the temp agency what you pay your similarly situated employees, but you don’t control the temp agency’s payroll practices. If they mess up and pay the temp worker less than the law requires, the law says you’ll be jointly liable.
Who said anything about fair?
Be sure your staffing agency agreement includes robust indemnity provisions. The agreement should also create a contractual obligation for the temp agency to pay workers all amounts they are due under the law so that, if the agency fails to do so, you can point to a breach of contract when seeking indemnity. Indemnity claims based purely on the law could be subject to challenge since the law also says there is joint liability.
Conclusions
This Temporary Workers’ Bill of Rights applies only to certain industries in New Jersey but, for users of temps in these industries, the law creates important new obligations.
For violations, the law allows for a private right of action and carries a six-year statute of limitations.
If you use temp labor in New Jersey in one of the covered industries, be sure you understand the new requirements. This would be a good time to go back and revisit your staffing agency agreements. They may need some tidying up.
Also consider requiring temp workers to sign individual arbitration agreements as a condition of being placed at your worksite. This strategy can help insulate you from a class action filed against both the temp agency and your company. Class actions against both entities are a particular concern, given the joint liability section of the new law.
As you know by now, the Emergency FMLA and Emergency Paid Sick Leave provisions in the Families First Coronavirus Relief Act apply only to employers with fewer than 500 employees. But lots of questions have arisen about how to count.
For those who need help counting, here’s a helpful resource:
But for those of you counting employees instead of bats, let’s try this instead.
Question #1: Do temps count?
Answer: Are we talking about feelings here? Because if we are, then everyone counts. You’re a winner! And you’re a winner! And you’re a winner!
Ah, but do they count toward the 500-employee threshold under Families First? Well that depends on whether they are joint employees of your business and the staffing firm.
As of last year, the answer for staffing agency temps was most often yes. But in January 2020, the DOL changed the test for how to determine whether someone is a joint employee under the Fair Labor Standards Act (FLSA). While there are different tests for determining joint employment, the one that matters for the Families First law is the FLSA test.
Answer: Yes. Count all part-time and full-time employees. Part-timers are people too. See, Feelings, Morris Albert (1975). Skip to 0:45 if you want to skip the instrumental intro.
Fun fact: In the late 80s, when you were arguing with your friends over which is the best Duran Duran song (answer: none), French songwriter Loulou Gaste successfully sued Albert for plagiarism, persuading a jury that Albert based the song on Gaste’s 1957 chart-topper “Pour Toi.”
Question #3: Do you aggregate employees across multiple subsidiaries?
Answer: Generally no. The default is that each subsidiary is its own employer. Divisions of a single subsidiary are aggregated.
But there are some situations when subsidiaries are aggregated. A conglomerate consisting of several different subsidiaries can a “single integrated employer,” in which case, you add the numbers together. We determine “single integrated employer” status by looking at four main factors:
Common management;
Common ownership;
Centralized control over labor relations and personnel; and
Interrelation of operations.
The more there exists common control, there more likely there is a single employer. There are many subfactors that also go into the analysis, and the most important factor tends to be centralized control over labor relations and personnel.
This is a difficult analysis, and there can be consequences to being a single integrated employer that go beyond Families First. If you think this applies to your company, proceed cautiously and seek legal advice.
Question#4: If I’m stuck home because of coronavirus, where can I find more helpful videos featuring The Count?
Suppose the chip is a check, and the employee tries to cash it twice? Who would you rather be, Costanza or Timmy?
Staffing agency clients are increasingly pointing to a fraud committed by disloyal short-term employees. They cash a paycheck on their mobile app, then deposit the paper check a second time for duplicate payment. The check clears twice. Who must pay?
While this problem can arise in many scenarios, including with regular W-2 employees, it seems to be occurring more frequently with staffing agency employees, PEOs, temps, and other short-term workers. So let’s take a look.
Who Is My Employee? 