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Monday, March 22, 2010

How long is too long for a temporary assignment?

A contingent workforce is often necessary to support operational requirements. Employer concerns over long-term temporary assignments have been on-going since the well-known litigation during the 1990s involving Microsoft Corp. (Vizcaino v. Microsoft).

A common misconception is that length of assignment should determine if a temporary or contract worker is in fact a common-law employee. There will always be a need for utilizing leased employees, and sometimes the need will extend well beyond a year or longer. To protect your company from exposure to litigation, make sure the staffing firm you select implements "best practices" to reduce risk of misclassifying employees.

The American Staffing Association (ASA) suggests the following guidelines.

Staffing firms should take responsibility for:

  • Recruiting, screening, testing, training, and interviewing the employees
  • Determining the employees' wages, benefits, and expense reimbursement
  • Hiring, firing, assigning, and reassigning the employees
  • Handling the employees' complaints and discipline
  • Distributing the employees' paychecks

Other steps that can be taken include:

  • Requiring distinctive badges for employees supplied by staffing firms
  • Making separate reference to the staffing firm employees in client communications
  • Channeling any client social invitations through the staffing firm
  • Making appropriate distinctions between staffing firm employees and regular employees in business cards, letterheads, etc.
  • Maintaining a staffing firm supervisory presence at the work site

Length of assignment is not the sole issue in determining the employment status of employees supplied by staffing firms. For tax and benefits purposes, it is one of many factors under the common-law control test. Assignment limits may even carry some risk if the client has not clearly excluded the staffing firm employees from its benefit plans because they might be construed as an effort to deny benefits by preventing the staffing firm employees from reaching the hours needed for plan participation.

In addition to minimizing contact with staffing firm employees, amending benefit plans to exclude staffing firm employees, and executing employee waivers, are important steps clients should take to protect against retro-benefits liability. Staffing agencies typically have benefits options to offer to their temporary employees.

Employers should be encouraged to review their assignment limit policies to determine whether they are too restrictive or even unnecessary. In any case, following the recommended guidelines will increase the value of staffing services to clients and reduce clients' exposure to liability.

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2 Comments:

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July 9, 2011 at 1:19 AM  
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August 21, 2011 at 8:51 AM  

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