The Obama administration implemented a joint employment rule in 2016 that made it far more likely that both temporary agencies and the entities that utilize the workers employed by temp agencies would be considered “joint employers” – hence jointly liable for violations of laws affecting workers. The Obama-era rule was reversed by the Trump administration, only to have the Trump-era rule rescinded and the Obama-era rule reinstated effective October 5, 2021.
As joint employers, staffing/temp agencies and the companies that utilize temp workers will share responsibility for abiding by workplace laws as well as liability for any violations.
We recommend that all clients re-examine contracts with temp agencies to ensure there is clarity about responsibility for decision-making, liability, complaints, and other workplace issues. While which entity pays the employee’s wage and provides benefits and insurance is usually clear, all parties should also be aware of which entity is responsible for maintaining a workplace free of discrimination and harassment, for investigating and remediating workplace complaints, and for attorneys’ fees and damages in the event of a workplace-related lawsuit.
If you have questions or need assistance with the joint employment rule as it stands today, contact employment team members Nicole Gardner or Jocelyn Hoefling.