Staffing agency insurance is vital because it protects the agency and its employees from issues pertaining to liability concerns. These agencies utilize the services of temp employees, who often move from job to job and employer to employer. There is not a set time frame for how long an employer may retain a temporary employee, however, the longer a temporary employee is retained, the more likely it is a court will consider the temporary employee a regular employee, changing their employment status.
Family and Medical Leave Act (FMLA)
To qualify for coverage, an employee must have worked for the employer for 1,250 or more hours during the past 12 months. A joint employer relationship exists for purposes of FMLA when a company has sufficient control over the work or working conditions of the temporary employee. When such a relationship exists under the FMLA:
- The temporary agency and the client company must count the individual as an employee to determine whether the employee is eligible for FMLA leave
- The primary employer is responsible for giving notices concerning FMLA leave
- The primary employer is responsible for providing the leave, and maintaining health benefits, and
- A joint employer will be viewed as the primary employer if it has the authority and responsibility to hire or fire, assign or place the employee, and provide pay and benefits
The primary employer is responsible for job restoration, and the secondary employer is responsible for accepting an employee returning from leave if the secondary employer continues its relationship with the placement agency and the agency chooses to return the employee to that job.
The Americans with Disabilities Act (ADA)
Where a joint-employer relationship exists, both the temporary agency and the client company are obligated to provide a qualified individual with reasonable accommodations on the job. Employer must have notice of such need, and providing the accommodation must not present an undue hardship.
ADA prohibits a client company from requesting only employees without a disability from a temporary agency. However, where a reasonable accommodation would involve significant expenses for both employers, despite the combined resources of the two entities, both entities can show undue hardship.
A temporary agency or client company that refuses to contribute to the cost of a reasonable accommodation may be liable for a failure to provide an accommodation, even if the other entity provides it. This clearly illustrates the importance of staffing agency insurance for these types of concerns.