A Primer on Using Temporary or Seasonal Workers in Your Business

Transcription

1 A Primer n Using Temprary r Seasnal Wrkers in Yur Business By R. Matthew Cairns Gallagher, Callahan & Gartrell Bx 1415 Cncrd, NH cairns@gcglaw.cm USLAW 2010 Spring Client Cnference Miami, Flrida

2 Intrductin Frtunately, there cmes a time fr successful businesses when demand utstrips supply. Mst ften we think f this phenmenn in terms f custmer demand fr prduct r services. Hwever, it is imprtant t als think f it in terms f human capital yur business is grwing s fast, r is s busy, r is in the middle f change that yu need mre wrkers t make it thrugh. If it is a lng term r prlnged situatin, they the business prbably needs t hire permanent emplyees as part f its grwth strategy. When the need is finite in duratin, then many businesses turn t temprary r seasnal wrkers. This Gd Thing is nt withut perils. This paper will discuss the use f temprary r seasnal wrkers, sme f the legal issues arising frm ding s, and discuss best practices. Hwever, each situatin and emplyer is unique, s it is best fr businesses t cnsult with their attrneys, but hpefully, this will prvide guidance n hw t prceed and what questins t ask. Backgrund The Supreme Curt has described the cmmn law analysis fr an emplyeremplyee relatinship as fllws: In determining whether a hired party is an emplyee under the general cmmn law f agency, we cnsider the hiring party's right t cntrl the manner and means by which the prduct is accmplished. Amng the ther factrs relevant t this inquiry are the skill required; the surce f the instrumentalities and tls; the lcatin f the wrk; the duratin f the relatinship between the parties; whether the hiring party has the right t assign additinal prjects t the hired party; the extent f the hired party's discretin ver when and hw lng t wrk; the methd f payment; the hired party's rle in hiring and paying assistants; whether the wrk is part f the regular business f the hiring party; whether the hiring party is in business; the prvisin f emplyee benefits; and the tax treatment f the hired party. Natinwide Mut. Ins. C. v. Darden, 503 U.S. 318, (1992)(quting Cmmunity fr Creative Nn-Vilence v. Reid, 490 U.S. 730, (1989)). These factrs are nt exclusive and each relatinship shuld be reviewed independently, thugh the 2

3 applicatin f the Darden factrs turn n variables within the emplyer s knwledge and categrical judgments can be made abut the status f persns with similar jb descriptins. Darden, 503 U.S. at An emplyee may be full time, part time, permanent, temprary, r seasnal. The definitin f these categries f emplyees is ften a creature f statute r regulatin, and reference shuld be made t yur particular jurisdictin s definitins. Bradly speaking, hwever, an emplyee is either full time r part-time regardless f whether she is permanent, temprary r seasnal. Temprary emplyment is fr a set perid f time e.g. days, weeks, mnths, life f a prject, perid f permanent emplyee s absence. Finally, seasnal emplyment is als fr a set perid f time but tied t annually recurring perids f wrk fr the business The Decisin t Hire Temprary r Seasnal Wrkers The American Staffing Assciatin ( regularly surveys its members n the reasns why businesses hire temprary wrkers. Its research reveals that 80% d s t cver fr absent emplyees r temprary vacancies, 72% d are seeking t prvide extra supprt during busy times r seasns, 68% are staffing shrt term prjects, and 59% are trying t find gd permanent emplyees. (Octber 2008). Fcusing n the 72% f businesses that want t add extra supprt during busy times r seasns, the reasn they d is ecnmic survival. If cmpanies cannt prvide the service their custmers r ptential custmers demand at their busiest times, then their reputatin will suffer, they will lse revenue during their prime time 1 Of curse there is the additinal categry independent cntractr. Since fr the purpses f this paper, it is assumed that the business hiring a temprary r seasnal wrker intends t exercise cntrl ver that persn s time, manner and place f perfrmance, discussin f independent cntractr issues is left fr anther day. 3

4 which is necessary t carry the cmpany during slw times, and ptentially slw times may get even slwer as a result f lst gd will. Als, failure t prvide necessary emplyee supprt may result in verwrking permanent emplyees which culd cause them t quit, make mistakes and/r incur vertime pay expenses that might exceed the cst f bringing in additinal emplyees. Hiring additinal permanent emplyees may als nt be the answer because when the pendulum swings back t nrmal r t belw nrmal, a business will be stuck with a blated wrkfrce and be frced t undertake layffs with the attendant legal requirements (e.g. WARN Act ntices, Unemplyment Cmpensatin bligatins) and cnsequences (e.g. severance payments, reduced mrale). a. Flying Sl. Finding and Hiring the Temprary Wrkfrce Sme businesses may chse t lcate and hire their temprary wrkfrce n their wn. The business may have been ding it fr s lng that they have a high cmfrt level that they can manage the prcess internally, r may be small enugh that the need is nt s great that prfessinal assistance is warranted. Cst may als play a factr businesses may believe that they can hire necessary wrkers at less cst than relying n an utside agency. If a business elects t g this rute, several imprtant steps must be fllwed: The advertisement must clearly indicate that the psitin penings are temprary. The interview must clearly apprise the candidate f the temprary nature f the psitin and what she is NOT entitled t. The emplyment agreement must be clear and specific. (A sample agreement is included at the end f this paper) The temprary wrker(s) must be trained in ALL f the business s plicies including plicies n harassment and discriminatin. 4

5 The temprary wrker(s) must be treated as temprary wrkers. The business s benefits dcuments must be carefully reviewed t ensure that they exclude temprary wrkers frm cverage. See Vizcain v. Micrsft, 97 F3d 1187 (9 th Cir 1996)(Vizcain I); Vizcain v. Micrsft, 120 F3d 1006 (9 th Cir 1997)(Vizcain II); Vizcain v. U.S. Dist. Curt fr Western Dist. f Washingtn, 173 F.3d 713 (9 th Cir.1999) (Vizcain III);Wlf v. Cca-Cla Cmpany, 200 F.3d 1337 (11 th Cir. 2000); Mntesan v. Xerx Crp., 117 F. Supp. 147 (D. Cnn. 2000). b. Finding an Experienced C-Pilt. Staffing cmpanies exist fr the express purpse f helping businesses thrugh temprary perids when mre emplyees are needed fr the business t perate successfully. The American Staffing Assciatin (ASA) claims 90% f client businesses say staffing cmpanies give them flexibility t keep fully staffed during busy times. These staffing cmpanies prvide a ready, willing and able wrkfrce that is prepared t be temprary. Accrding t the ASA, 2.01 millin peple are emplyed by staffing cmpanies every business day; and 8.6 millin temprary and cntract emplyees are hired by U.S. staffing firms ver the curse f a year. Id. A business cnsidering using a staffing cmpany t help secure a temprary wrkfrce shuld d its research t find a cmpany that has experience in its industry. Remember, this staffing cmpany is ging t be yur partner t help get yu the resurces t get yu thrugh yur perid f need. The cmpany needs t be cmfrtable with what yur business des and what yur specific needs are. Thse experienced cmpanies will likely have ther clients in similar industries and have a stable f emplyees that will require minimal n the jb training nce placed with yur business. 5

6 Other benefits that a staffing cmpany ffers are: Makes clear that the Temp is an emplyee f staffing cmpany, NOT yur business Handles Human Resurces respnsibilities Disciplines emplyees fr miscnduct at yur business Can reassign r terminate them frm their assignment at yur request and can limit the hurs the individual wrkers are assigned t yur business t be sure that the ERISA 1000 hur rule (26 USC 410(a)(3)(A)) is nt triggered. Handles payrll, taxes, benefits (yu pay the staffing cmpany a perwrker fee) Prvides Wrkers Cmpensatin insurance in many instances 2 Undertakes general training f ITS emplyees n matters such as harassment, discriminatin, wrkplace safety (Yu need t ensure that yur Temp Firm is ding this) Just because yur staffing cmpany is ding all this fr yur business, yu are nt abslved f any ther bligatins regarding that temprary wrker. Just as if yu had hired the temprary wrkers directly, yu still need t train them n wrkplace expectatins, rules and plicies; yu need t cnfirm their understanding f harassment and discriminatin rules; yu need t maintain a safe wrkplace fr them; and yu need t cmply with all lcal, state and federal regulatins that may impact them. 2 In mst states, c-emplyers enjy the benefit f the exclusive remedy f the wrker s cmpensatin bar, and thus yur business wuld be prtected by the staffing cmpany prviding wrker s cmpensatin t the temprary wrker. 6

7 Using a staffing cmpany des nt prevent an emplyer-emplyee relatinship frm being created between yu and the temprary wrker assigned t yur business. At cmmn law, a servant... permitted by his master t perfrm services fr anther may becme the servant f such ther in perfrming the services. Restatement (Secnd) f Agency 227 (1958). Starting with a relatin f servant t ne [emplyer], he can becme the servant f anther [emplyer] nly if there are the same elements in his relatin t the ther as wuld cnstitute him a servant f the ther were he nt riginally the servant f the first. Id. 227 cmt. a. In ther wrds, in analyzing whether a persn may be the emplyee f tw different emplyers, yu need t lk at the cmmn law factrs utlined in the Restatement and in Darden. Case law appears clear that in staffing cmpany situatins, when applying the cmmn law Darden test, a temprary wrker can be the emplyee f bth the agency and the business client. See Vizcain III, 173 F.3d at ; see als Vizcain I; Vizcain II; Wlf; Mntesan. Since the trend appears t be that temprary wrkers, despite a lt f yur effrts, will still be deemed yur cmmn law emplyee, they may have a claim t benefits during their perid f temprary emplyment and/r after their assignment ends. Careful attentin needs t be paid t yur benefit plan dcuments s that they limit wh is eligible t participate and a thrugh reading and understanding f the Vizcain I-III, Wlf, and Mntesan cases shuld ccur. Temprary wrkers can als make yur business subject t state and federal emplyment and discriminatin laws and regulatin. Fr example, under Title VII, the ADEA, and the ADA, an emplyer is cvered if it has an emplyment relatinship with the requisite number f emplyees fr the relevant number f weeks, regardless f the daily wrk schedules f the individual emplyees. See Walters v. Metrplitan Educ. Enter., Inc., 519 U.S. 202, 206 (1997); EEOC Cmpliance Manual, Vlume II, Sectin II 7

8 Threshld Issues, 2-III ( The Cmpliance Manual specifically states: T cunt emplyees, determine the number f emplyees n an emplyer s payrll; exclude individuals wh are nt emplyees, e.g., discharged/frmer emplyees r independent cntractrs. Add t that figure any ther individuals wh have an emplyment relatinship with the emplyer, such as temprary r ther staffing firm wrkers. Id. Therefre, if a discriminatry act ccurs t a temprary wrker at yur business, yu AND the staffing cmpany may be subject t liability. Id.; see als Cmmissin's Enfrcement Guidance n Applicatin f EEO Laws t Cntingent Wrkers Placed by Temprary Emplyment Agencies and Other Staffing Firms, Questins 1-2, N: (BNA) (1997)( A Few Best Practices fr Using Temprary Wrkers Have clearly defined status fr yur temprary wrkers Direct Cntract with them Thrugh reputable staffing cmpany Avid creating a cmmn law emplyee relatinship (hard t d, see Darden; Vizcain I-III; EEOC manuals) Cnsider separate training D nt include them in cmpany-wide events Deal with them thrugh the staffing cmpany Have clear agreements with the Staffing Cmpany Be sure their dcuments advise the wrker that they are nt a client emplyee Be sure that they d basic training n harassment, discriminatin Have yur benefit dcuments clearly exclude temprary wrkers frm the plan 8

9 Sample Agreement TEMPORARY WORKER AGREEMENT I understand and agree that I have been hired as a temprary wrker at XYZ LLC fr the purpse f [ Insert descriptin f the jb duties/prject/psitin ]. I agree and accept that my emplyment begins n (Date) and ends n (Date). I further agree and accept that XYZ LLC may change the ending date f my temprary emplyment at its sle discretin withut prir ntice t me. I acknwledge that as a temprary wrker, I have n senirity ver ther permanent r temprary wrkers, nr d I have a guarantee f being called t help XYZ LLC in the future. I understand that I must cmply with all cmpany plicies, and failure t d s can result in immediate terminatin f this agreement. I als understand that I am nt eligible fr the fllwing benefits: 1) Health and Welfare Plan 2) Pensin Plan, as lng as my hurs wrked were less than 1,000 during the plan year 3) Vacatins 4) Hlidays 5) Paid Sick Time 6) Severance r ther terminatin payments 7) Other (List) Emplyee s Signature Date Human Resurce Manager s Signature Date 9