Reliance on temporary workers is widespread in the logistics industry, particularly in warehousing, furnishing supply chain operations a cost-effective way for adjusting to seasonal and other demand fluctuations. However, recent and pending changes in laws and regulations regarding temp staffing require close attention to avoid costly legal trouble.
However, if you think that acquiring workers through a temp staffing agency insulates you from safety and wage law violations, you are dead wrong. "To the contrary, the courts have consistently ruled that the customer is a joint employer along with the subcontractor or labor supplier and, thus, jointly liable for all aspects of the employment relationship," says Nicholas Hankey, a labor law attorney with the firm of DLA Piper.
OSHA, the Department of Labor and National Labor Relations Board hold that the host employer and staffing firm bear joint responsibility for wage and safety violations, and they are developing new regulations and policies based on that position.
The states also are involved. In California, New Jersey and Illinois this was driven by union-backed efforts by worker centers that combine union and community organizers, aided by friendly state agencies and legislators. Specifically targeted were 3PL warehouse operations that serve Walmart to advance the unions' strategy for attacking the nonunion retailer.
Last year a court in California said Walmart shared liability with the staffing firms hired by its 3PL warehouse providers if those temp firms violated wage laws. Soon after that ruling Walmart and its warehouse provider settled a lawsuit for $21 million that had accused them with abetting poor treatment of 1,800 temp workers in California by several temp firms, which also settled with the state. On January 1 a new California law codified the joint liability of host firms for temp agency wage violations.
Hankey urges host firms to insist that leasing agencies have employment practices liability insurance, including naming the host business as an "additional named insured" at the leasing company's expense. Contracts also should include an indemnification clause because insurance won't cover wage-hour violations. "But, unless the business uses a reputable, well-capitalized leasing firm, this provision may be worthless," he warns.
When the temp workers are at the worksite, audit the staffing firm for the most common problems—including compliance with the I-9 Form verifying the identity and employment authorization of employees, wage-hour compliance and OSHA violations. "The best answer remains 'trust but verify,'" Hankey stresses.
Reacting to widespread reports of temp worker injuries and even deaths, OSHA launched a major nationwide temp staffing initiative in 2013, and plans to devote extra resources to it under its current budget proposal. According to OSHA, the bottom line for employers is that you "must treat temporary workers like any other workers in terms of training and safety and health protections."
Last year OSHA and the American Staffing Association signed an agreement to work together to improve working conditions for temporary workers, the agency published a reporting guidance for employers, and OSHA joined the National Institute for Occupational Safety and Health to issue safety and health best practices guidance for employers.
OSHA's position is that host employers are in a better position to provide safety training on a hazard or equipment unique to their worksites and are expected to act accordingly. That's why it is important to document in your contract with the temp staffing firm respective safety responsibilities for temp workers, including training.
It should confirm which employer supervises the workers on the job, and who maintains injury and illness records. Also make sure all temp workers are provided with necessary safety tools, personal protective equipment, and training in a language they understand. Training should be documented and available to an OSHA inspector.
In OSHA's view, temporary workers should receive the same training and protections as hourly employees. But that's not just a government requirement; it's the right thing to do.
David Sparkman is founding editor of ACWI Advance (www.acwi.org), the newsletter of the American Chain of Warehouses Inc., as well as a member of the MH&L Editorial Advisory Board.