The Legal Obligations of Staffing Agencies for Employees

The “gig” economy is booming and will only continue to grow, leading to more employees using staffing agencies to secure short-term employment, so developing the law in this area has become an important endeavor. The economy has responded to the increasing pressure to improve financial performance by businesses focusing on core competencies that provide the greatest value to consumers and investors and letting go of less essential activities. Nowadays, companies rely on staffing agencies to fill these positions efficiently and inexpensively. The way American workers organize their work lives has evolved. More and more workers are using temporary, short-term jobs at numerous employers over the course of their careers, instead of building long-term relationships with one or a small handful of employers. This often leads to a stronger relationship with the staffing agencies they use to find jobs than with the employers in whose offices they work. Plus, most staffing agencies operate nationwide. Therefore, their policies may affect thousands of employees at workplaces across the country. Here’s a closer look at the legal obligations that staffing agencies hold for their employees and their placements.

Protecting Temporary Employees against Discrimination or Harassment

Are your clients aware of how employees will be protected in their employment placements? With staffing agencies’ significant role in today’s economy, both agenices and client employers understand their legal obligations under anti-discrimination and harassment laws. It is also important that workers know who is responsible when they are victims of these incidences. Plaintiffs often bring charges against both the staffing agency that sent them to a workplace and the company where they perform their job under the assumption that they are joint employers. However, this is not the case, and professional legal assistance is strongly recommended. First and foremost, your clients should secure staffing employment practices liability insurance to adequately protect their firm from these kinds of legal cases.

Determining Liability in Workplace Harassment Cases

Legal ramifications would be completed in efforts to place liability appropriately in harassment cases in joint employer situations. Each case is unique and must be treated as such. Under existing precedent and general negligence principles, it is possible that staffing agencies could be held liable for harassment that occurs at job placement, even if the harasser is not one of the agency’s employees, if the agency was proven to be negligent in placement. This could mean that they knew or should have known about the harassment and failed to correct the situation within their control promptly. However, when the staffing agency does not employ the harasser, there are limited corrective measures that the staffing agency can take. For instance, the staffing agency could not terminate the individual or transfer them to a different location.

The staffing agency can still take corrective measures, such as making the harasser’s employer aware of the harassment and insisting that they take prompt investigative and/or corrective measures. The staffing agency employee must be offered to take a different job assignment at the same pay rate if they decided to. What you and your clients should be cautious and take note of:

  • Are employees continually complaining to their agencies about the hostile or offensive work environment?
  • Does the staffing agency fail to take timely preventative or remedial actions?

In these instances, the agency can reaffirm staffing agencies’ obligation to provide employees a workplace free from any harassment. Staffing agencies should never ignore any talk of discrimination and harassment. It is in their best interest to provide their employees with the same workplace protections as any other employer.

About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.