With the historic rise of temp workers in the workplace, some ambiguity has existed as to whether an employer can be held liable for employment claims brought by its temporary employees. Some employers are under the mistaken impression that they are not liable for employment claims against those who are not its regular employees.
Prominence of Temp Workers
Temp workers and contractors make up an increasingly large portion of the workforce, particularly in the tech industry. A recent study found that over 3.2 million people in the United States workforce are temp workers. Contingent workers, like contract workers and temp workers, account for 40 to 50 percent of the workers at most technology firms, according to OnContracting, a site that helps people find work in the tech industry. Additional estimates include that technology firms can save, on average, $100,000 a year per role by using a contingent worker instead of a full-time employee.
Technology companies are not the only ones with a large number of temporary employees. In reference to the auto industry, labor economist Susan Houseman estimates that “[I]t would not be unusual for 20 to even 30 percent of the production line to be temps.” Additionally, a recent survey found that even 45 percent of health care facilities have used temporary physicians in a given month.
Discrimination of Temp Workers
Discrimination of temp workers has become an increasingly rampant problem and consequently has led to increased litigation. Some discrimination is allegedly as blatant as employers requesting workers with specific ethnic backgrounds. In a recently settled case in Georgia, two hours into an assembly-line shift, a few African American temp workers were allegedly instructed to leave. A temp agency representative purportedly following up, apologized, and admitted, “the company told me to only hire Mexicans.”
Other employers allegedly tried to be more discrete by asking for “hockey players” when they wanted a Caucasian temp worker, or for “small hands” for a female temp worker. One case in Oklahoma allegedly involved a “code” where a temp agency marked applications with a dot for African American workers, a circle for Hispanic applicants, and an “X” for Indian candidates.
EEOC’s Protection of Temp Workers
The EEOC has clarified that temp workers are generally covered under the anti-discrimination statutes. Temp workers typically qualify as “employees” of the staffing firm, employees of the client to whom they are assigned, or both. Temp workers are largely categorized as employees of the staffing firm for the simple reason that the temp worker receives their paycheck from the temp agency, and the temp agency receives a payment from the client for its services.
The process for classifying a temp worker as an employee of the client is a less clear matter. A temp worker can be categorized as an employee of the client if the client maintains the right to control the means and manner of the temp worker’s work performance. There are multiple factors that help determine who maintains the right to control the means of their work, including, just to name a few: whether the client has the right to control when, where, and how the worker performs the job; whether the client, rather than the worker, furnishes the tools, materials, and equipment; or if the work performed by the worker is part of the regular business of the firm or the client. In short, the temp worker may effectively become the client’s employee for legal purposes, if the employer has sufficient control over the temp worker’s tasks.
Even if the temp worker cannot be categorized as client’s employee for legal purposes, the client still may not discriminate against temp workers. The anti-discrimination statutes not only prohibit an employer from discriminating against its own employees, but also prohibit an employer from interfering with a person’s employment opportunities with another employer. Consequently, a client that discriminates against a temp agency’s employee could be liable for unlawfully interfering in the individual’s employment opportunities.
Temp Worker Wages
In addition to discrimination, some employers have paid temp workers improperly. Recently, J&J Snack Foods Corporation (“J&J”), with a facility in Swedesboro, New Jersey, along with Pennpak, one of J&J’s staffing firm, had to pay 212 temp workers $920,000 in back wages and liquidated damages after failing to pay the temp workers minimum wage and overtime. Months later, J&J and Sebastian and Sebastian LLC, another of J&J’s staffing firms, paid an additional $1,260,254 in back wages and liquidated damages after failing to pay proper overtime to 465 temp workers.
Temp Worker Treatment
While some issues temp workers face, such as discrimination and improper pay, have legal remedies, other issues, like social issues, are harder to fix. Google’s temp workers, roughly 121,000 in total, outnumber the 102,000 regular employees with the company. However, the temp workers at Google feel they are treated as if they were in a lower caste at the company. Those temp workers cite instances where regular employees received emails about workplace security concerns and the temp workers in the same office would not receive the email. Allegedly, the temp workers were also not allowed to attend a meeting the day after a cyberattack. Temp workers are also not permitted to look at internal job postings within Google, attend company job fairs, or participate in all-hands meetings or holiday parties. In response to the issues with its temp work force, Google now has temp workers reporting to managing temp workers, who are allegedly the only ones permitted to speak to full-time employees. Additionally, these temp workers are being moved into a separate building managed by outside contractors.
Employers can indeed be liable for employment claims against those who are not its employees, including any temp workers. With both the number of temp workers and incidents of discrimination increasing, ensuring temp workers are treated with the same respect as traditional employees will help employers avoid any issues with the EEOC. Additionally, temp workers may be entitled to minimum wage and overtime pay, despite not being regular employees. Finally, while not required by law, treating temp workers as if they are not part of the team could result in the temp workers resenting the work that they do and who they do it for. We encourage our readers to consider the consequences of hiring temp workers and seek counsel if the need for temp workers arise.