On Wednesday, January 20th, the Labor Department issued a new guidance regarding joint employers in the U.S. economy. A joint employer is one that is defined as a company that employs workers through subcontractors, also known as staffing agencies. Joint employment is more common now than it ever has been, and there are several reasons why.
For years, corporations have utilized staffing agencies as an option to direct hires because of several factors, the biggest of which is that they pay lower wages than the company would have too and they also do not have to shell out money for benefits. In essence, these employees are being directed in their jobs by the corporate leaders, but are subject to lower wages than some of their counterparts. It has been easy for corporations to side step the responsibility, as it has laid squarely on the temp agency.
The new guidance stated that corporations that employ their workforce through staffing agencies should be held responsible when labor laws get broken, regardless of whether they are paid through the staffing agency or the company.
Outsourcing has become a common practice for many companies, particularly during busy times of the year. Big box retailers, online suppliers and companies that have particular times of the year where an influx of talent is needed rely on staffing agencies to assist in filling these spots. The important thing with this guidance is simply to tell these companies that utilize staffing agencies that they are responsible for making sure that the workers are being treated responsibly, just like they would their own direct hires.
The assumption is that this guidance will have very little impact on the use of temporary employees, but rather will heighten the awareness of ensuring that these workers do not fall through the cracks if this is the path they choose for their personal employment opportunities.