Pennsylvania Employment Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Lancaster, York, Harrisburg

Employers can take steps to minimize and/or manage their potential for "joint employer" status with a temporary agency. To avoid the creation of a joint employment relationship, the following is a list of some of the contractual and policy steps that should be undertaken:

• Right to Direct and Control Work of Temps - The right to direct and control the activities or the temporary employees should rest exclusively with the temporary agency.
• On Site Supervision - The temporary agency should have an on site supervisor to direct the work of the temps; otherwise, the default supervision will be the company's supervisors
• Disclaim Company Control - Company should not have the right to direct or control the activities or temps
• Disclaim Joint Employment Relationship  - Although it is largely window dressing, any agreement should state expressly that it does not create a join employment relationship
• Mandate Legal Compliance by the Temporary Agency - The legal compliance provisions set forth in the next section should be addressed
• Require Proper Payroll Reporting and Recordkeeping - Require that the agency be responsible for all payroll taxes, withholding and tracking of hours for FLSA compliance. Make certain that unemployment taxes and social security withholding are accomplished
• Require Evidence of Insurance - Obtain proof that the agency has appropriate insurance coverage for workers compensation, employment practice and liability insurance
• Obtain Indemnification from the Temporary Agency  - Obtain contractual indemnification which provides that the agency will pay damages and defense costs should the company be charged with employment law violations, unpaid taxes, unemployment or workers' compensation awards
• Limit Assignment of Temporary Workers - Limit the duration of assignment of a worker to your work site to no more than six months. Longevity of the placement is an indication of employment relationship; particularly, if temporary workers perform operations integral to the business. Companies risk creating "permatemps" who may seek benefits.
• Avoid Changing Employee Status - Except in the context of PEO's, don't outsource a group of employees to a temporary agency so that one day they are performing work as an employee and the next day as a temp.

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Staffing is a critical and time consuming function for human resource professionals. To expedite the process, many employers turn to staffing agencies to assist in or even take over the staffing function. Relationships with staffing agencies can take a variety of forms including temporary placements, temp to hire arrangements, and employee leasing with a professional employer organization (PEO).

 Many employers are surprised to learn that their company may have legal responsibility and even liability for temporary and leased employees. Liability arises when a company has the right to control the manner of the performance of the worker's activities.   When such a right to control is present, a company may be a joint employer with the temporary agency or PEO. Most common temporary agency relationships create joint employment because the temporary worker performs services at the company's business location under the direction and supervision of the company.

 The prime example of the joint employment principal in Pennsylvania is found in the case of JFC Temps, Inc. v. WCAB (Lindsay and G&B Packing), 680 A. 2d 862 (Pa. 1996). In JFC Temps, a worker was hired by a temporary agency, and was assigned to work for a trucking company. The worker performed his services at the trucking company, and the trucking company manager informed him of his work hours, the equipment he would be using, and the locations to which he was to drive. No representative of the temporary agency was ever at the trucking facility. The worker was injured in the course of the performance of the services for the trucking company. The injured worker sought workers' compensation benefits from the temporary agency.

Under these circumstances, the Pennsylvania Supreme Court held that the trucking company (not the temporary agency) was the injured worker's employer for worker's compensation purposes because the trucking company possessed the right to control the manner of the performance of the claimant's work. In fact, the Court noted, the temporary agency had no substantial contact with the claimant other than processing his paycheck, and, as such, could not be said to have controlled the manner of performance of the work. The Court so held despite the fact that the temporary agency had the authority to terminate the injured worker's employment.

The obvious problem for the trucking company was that the workers' compensation claim was likely uninsured since it did not consider the temporary worker to be one of its employees. This type of unexpected liability translates into other areas of the employment relationship like pension and medical benefits, payroll taxes, and discrimination laws. 

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Who's an Employer?  In the past week, I've had occasion to talk to several HR professionals about how the number of employees can define whether various employment laws apply, and that just a few employees either way can make a big difference, particularly for small employers.  Pay attention to the following shortlist, particularly if you have turnover and frequent changes in the number in your workforce.  Remember that how part time employees are counted also changes from statute to statute.  There may also be exemptions from coverage for certain industries like agriculture.    

      Total Number of Employees:                          Subject to the following employment laws:

• All employers regardless of size . . . . . . OSHA, Equal Pay Act (EPA), Immigration Reform and Control Act (IRCA)
• You have 4 or more employees . . . . . .  Pennsylvania Human Relations Act, Lancaster County Human Relations Ordinance
• You have 15 or more employees . . . . . . Title VII,   Americans with Disabilities Act (ADA)
• You have 20 or more employees . . . . . .  Age Discrimination in Employment Act, COBRA  
• You have 50 or more employees . . . . . . Family and Medical Leave Act (FMLA)
• You have 100 or more employees . . . . . . Worker Adjustment and Retraining Notification Act

The above is a partial list of statutes and law that apply to employers in Pennsylvania. For more information federal discrimination laws, consult the EEOC website.

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The U.S. House of Representatives voted 241 to 185 to pass H.R. 800 which is a bill that would change the process for unions to organize a workforce.  The bill would require the NLRB to certify a union when a majority of workers sign authorization cards that designate the union as their bargaining representative.  The card check process would eliminate the secret ballot election traditionally used to determine union representation. 

Under the current law, union organization of a workforce occurs after a showing of interest to the NLRB by the presentation of authorization cards together with a recognition petition identifying what the union believes to be an appropriate unit for organizing.  The employer may contest the appropriateness of the unit by demanding a hearing before an NLRB representative.  After the unit is certified as appropriate by the NLRB, a secret ballot election is held (generally within about 30-45 days after the petition was filed).  If the union receives a majority of the ballots cast by employees in the unit, it wins the right to represent the employees in an appropriate bargaining unit.

Eliminating the secret ballot has a tremendous impact on an employer's ability to combat organizing attempts.  The following is a partial list of problems created by the card check process:

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The change to Daylight Saving Time a few weeks early this year has caused some internet buzz including discussions of the myriad of computer related problems that might result.  Fortunately, I still have the  stock pile of bottled water and cases of canned food that I purchased for the impending doom prophesized by the Y2K pundits. I came across an InformationWeek article that I thought put the issue into perspective. 

The change will certainly require some attention from your IT Department and may impact some things you will need to deal with personally.  I have taken the precaution of noting times in the text of my appointments on my Outlook calendar, just to be sure that I am where I need to be at the correct time in March.  I have also reviewed the Microsoft Daylight Saving checklist to be sure that I don't have any surprises on my personal computer.    

Some employee communications might make the HR department look good.  You might consider sending a reminder to your employees via your company intranet or in a mass email.  It is likely that the early time change may take some by surprise. 

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