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.
The best way to protect the company against the risks and consequences of joint employment is in the contract with the staffing agency. Here are Ten Things That Should Be in Your Staffing Agency Agreement But Probably Aren’t.
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.
1. An egg
2. A candle
© 2023 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.