In breaking news on Yahoo! Finance, we find that the staffing firm Robert Half International is being sued by a former temporary employee, Leonor Rodriguez. The suit charges the staffing firm of denying compensation to current and former temporary workers fort time spent interviewing with the clients of the staffing firm and on activities related to the interview process. The staffing firm is confident that it has a fitting defense against the claims, which could result in costs up to $5.0 million.
This is not an issue that came up all of a sudden. Referring to an earlier legal action with a similar logic, we find that Kelly Services was asked to pay $2.75 million for the time its workers spent attending interviews. This case may help to add more clarity to the issue. In fact, we did discuss both sides of this issue three years ago. At the time, we had also expressed a concern that this issue would cause legal wrangles for staffing firms unless they adopted some measures to contain it.
While waiting to see how this latest case plays out in court, businesses can learn a great deal from the factors considered in the Kelly case, as there are strong correlations between the two. In both cases, the critical question to be determined is, “do agency contractors remain employees of staffing agencies between assignments? If so, under what conditions?”
When an individual first applies to work for a staffing agency, the worker is typically asked to sign an agreement with language that indicates that employment begins on the first day of the first position. That tends to clarify when employment starts, but when does it end? Most agencies go further, indicating that their intent is to “redeploy” the worker at assignment end to another client. During that period between assignments, when the agency is seeking new engagements for the worker, is the worker still employed by the agency? One might quickly say, “No. The worker is not being paid because the individual is no longer doing any work.” The work experience is viewed as a series of disjoint employments with the same staffing company, each with a specific start and stop date. BEWARE: the courts may not agree with you! Using the Kelly Services case as a precedent, it appears that level of control carries more weight than client engagement end dates. Factors considered in that case that caused the California court to side with the plaintiff included:
While it provides insight into the thought process that may decide the outcome of the Robert Half case, it raises new issues. What happens if the temporary worker completes an engagement for a staffing agency, then interviews for positions with numerous staffing agencies? Can the worker expect to be compensated for interview time with the “incumbent” agency? How much time can elapse without finding a suitable position before the individual is no longer considered an employee of the agency? How do regulations regarding the filing of unemployment claims fit with all of this? When filing for unemployment, the worker must call the temp agency daily to get job referrals. If they don’t, the temp agency can say that the worker voluntarily quit working for the agency. At the same time, if the temp agency offers suitable work to replace the former temp job, and the offer is declined, it can disqualify the worker from receiving benefits.
Given the lack of clarity in this area, and the potential risks associated with “getting it wrong”, every staffing agency should seek legal assistance in reviewing its policies and contractual agreements to ensure compliance with regulations regarding compensation of temporary employees.
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