August 17, 2011
CW Managers today need to walk the tight rope, balancing their use of contingent workforce to contain cost of human resources while ensuring productivity and profitability goals; but they also carry a responsibility to see that the organization does not get into hot waters with violating compliance requirements. Today, we will talk about what every manager needs to know about mitigating co-employment risks – and the Procurement and Administrative Skills to facilitate that goal.
Ignorance does not Absolve:
All managers are extremely focused on finding the right fit for a candidate with the role and sometimes it becomes very difficult to stay uninvolved in any aspect of the procurement effort, especially when hiring contingent workers. Many inexperienced suppliers and MSPs also fail to provide proper guidance to managers involved in an interview. Some of them are actually happy to encourage them to pose questions to the candidate. Whether it is out of sheer ignorance (or lack of risk-aversion), these MSPs and suppliers are most definitely putting the organization in a dangerous position. Organizations need to establish the first line of defense through training their managers adequately to know the restrictions and boundaries which they cannot pass, in handling contingent workforce relations, because a lack of awareness (read, ignorance) is not admissible in any court of law.
Co-employment issues in Hiring:
The risk of co-employment is the Damocles Sword, hanging on the head of every manager and every manager needs to be informed on the considerations which underlie the determination of such an issue. The managers must know that their role is restricted to directing and controlling the day-to-day work of the contingent worker, who is an employee of the supplier for all aspects of employment and matters of economic control.
To elaborate, the following administrative duties are placed squarely on the shoulders of the supplier:
- All activities related to recruitment like screening, interviewing, selection, hiring and termination of the employee.
- Maintenance of all records pertaining to screening and background checks, personnel and payroll matters.
- All complaints and grievances of the worker and the record of their resolution.
- Termination of the worker, at the request of the customer.
“Hands-off” plan for the Managers:
Keeping the above broad guidelines in mind, a manager should be advised of the following general rules, to ensure that no state or federal law will consider the contingent worker as co-employed. It is extremely important to find a competent and experienced supplier with established policies and procedures in place to assist in managing the whole plan efficiently.
- A manager’s involvement at interview level should be strictly restricted to questions that ascertain the candidate’s skills and nothing other than that.
- Hiring and firing instructions are not issued by the manager for any reason.
- All information related to payroll, bonus, benefits and raises are out of bounds for the manager and must be handled only through the supplier.
- Where the quality of the contingent requires a real focus and internal knowledge to find a perfect match – the manager must work through the supplier by keeping the lines of communication open and getting the suppliers to customize their assessment process to suit and meet the requirements.
- Get the supplier to understand the kind of work environment on offer; and ask them to share the information with the candidate beforehand.
- A manager can detail the expectations and quality parameters and work with the supplier on the required standards but had better not try to enforce them, especially during the interview process, through any personal intervention.
- Involve the supplier in conveying improvement inputs, term extensions as well as appreciation to the contingent workers to keep them committed.
- Any feedback and suggestion requests may also be routed through the supplier.
The risk of co-employment varies with state laws and can have federal courts interpreting them differently as it is really not easy to know exactly when the line is crossed and co-employment risk devolves on a company. Among other things, choosing a competent supplier to recruit and manage one’s contingents holds the key to success and goes a long way to ease the pressure on managers.
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.