Employee Liability: How Can Staffing Agencies Be Held Liable?

Employee Liability: How Can Staffing Agencies Be Held Liable?

 Employee Liability: How Can Staffing Agencies Be Held Liable?

In our post, “Why Staffing Agencies Need Employment Practices Liability Insurance”, we discussed a number of legal issues that staffing agencies could potentially face in relation to employee practices. An important part of understanding why you need this insurance is to know how exactly your staffing agency could be held liable. Staffing agency liability depends largely on what is stated in the contract between the two parties; the agency and the potential candidate. In general, staffing agencies have a duty to truthfully disclose information about employers to prospective employees. Here are some legal issues that demonstrate just how staffing agencies can be held liable.

  • Negligent Misrepresentation. If a staffing agency makes a false representation about an employer, they can be held liable. For example, the agency may be subject to a civil suit if they misstate information regarding wages.
  • Breach of Contract. A staffing agency’s agreement with their candidates may contain specific details about the employment, such as the amount of fees the client will have to pay. A breach of any contract provisions could be grounds for liability.
  • Violation of Statute. Statutes govern the operations of private employment agencies. Such statutes often dictate the relations between the staffing agency and its clients. Discrimination claims and failure to obtain an operating license are common example of violations.

These are a few of the ways that staffing agencies can be held liable by their candidates. It’s important to keep in mind that they may also be held liable to employers for the same reasons mentioned above.

World Wide Specialty Programs has always had a singular purpose – to design, develop and provide staffing insurance products for the staffing industry. Working with over 2,000 insurance brokers nationwide, we know the staffing industry better than anyone, and can provide great options for your staffing industry insurance needs. Our Employment Practices Liability policy, designed specifically for staffing services, provides coverage to the staffing firm for their in-house employees and for their contract, (temporary employees) placed with clients who are subject to the client’s workplace environment. Contact us today for more information about our staffing agency insurance solutions. (877) 256-0468.

Please follow and like us: