Legal Quick Facts

Co-employment is a commercial relationship between two or more businesses, such as a staffing firm and its client, in which each has actual or potential legal rights and obligations as an employer with respect to the same employee or group of employees.

Clients are generally co-employers of temporary or contract employees because they direct the day-to-day activities of the employees and determine how long they work. However, each case must be examined on its particular facts to determine whether an employment relationship exists.

Staffing firm clients have primary responsibility for maintaining safe worksites, while staffing firms have a responsibility to take reasonable steps to determine the conditions at the worksite, provide generic safety information, and advise temporary and contract employees about how to obtain more specific information regarding protection from hazards at the client site.

As a general rule, it is the utilizing employer (the client) that must keep and maintain injury and illness records required by the Occupational Safety and Health Administration.

There are two key differences between temporary and part-time employees: part-time employees generally work less than a full-time workweek (i.e., less than whatever number of hours in a week the employer considers to be full-time), and also work a regularly established schedule. Eight out of 10 staffing employees work full time, about the same as the rest of the workforce.

Under the Family and Medical Leave Act, if a staffing firm client is still using the services of the staffing firm to fill the same or equivalent position of a staffing employee who previously was assigned to the client when that employee returns from FMLA leave, the staffing firm must reinstate the employee immediately, even if this means removing another employee from the job. Moreover, the client generally must accept the returning employee.

If the staffing employee is eventually hired by the staffing client, the employee’s time on temporary or contract assignments with the client generally will count toward satisfying the employee’s eligibility requirements under FMLA (i.e., the 1,250 hours worked and 12 months of service tests).

Staffing firms are required to verify their temporary or contract employees’ work eligibility. Clients are under no obligation to verify work eligibility status of temporary or contract employees provided by staffing firms.

Staffing clients generally have a joint obligation with their staffing firms for compliance with the Americans With Disabilities Act. This obligation includes sharing the cost of providing reasonable accommodations to employees with disabilities.

Both staffing firms and clients may be liable when clients’ unfair labor practices violate the National Labor Relations Act. To avoid such charges, staffing firms and their clients should not discriminate against employees or applicants on the basis of union membership.

Staffing firm clients that arbitrarily limit the length of temporary or contract employee assignments to avoid benefits liability may be unnecessarily disrupting their business operations. Clients can avoid benefits liability by drafting their benefit plans clearly and explicitly to exclude staffing firm employees.