The Law @ Work

Temp Agency’s Mistake Causes Trouble for Employer

by Amelia J. Holstrom

Employers throughout Massachusetts use temporary staffing agencies to fill vacant, temporary, per diem, seasonal, and other positions.  Those staffing agencies must comply with certain laws, including Massachusetts General Laws Ch. 149, §159C.  That law, which was amended in 2012, requires staffing agencies to provide workers with written notice of the agency’s name, its worker’s compensation carrier, the name of the worksite employer, and a description of the job to which the worker is being assigned.  Further, it allows temporary staffing agencies to charge a fee for transporting workers to the job site, but that fee cannot exceed 3% of the employee’s daily pay.   But what happens when the temporary agency is not complying with the law?  Can the employer be liable?  A recent Superior Court decision says yes.

Here are the facts

Marleny Palacio was employed by Job Done LLC, a temporary staffing agency, to do work for Fulfillment America (“FA”).   According to Palacio, Job Done provided transportation to and from FA’s facility and charged employees $4.00 per round trip.  FA did not charge the employees for transportation.  Palacio filed a lawsuit on behalf of herself and the other employees of Job Done and FA alleging that the $4.00 fee was more than 3% of their daily pay.

FA requested that the court dismiss the claims against it, arguing that FA should not be liable because FA had not charged the fee and that Job Done was not acting in FA’s interest when it charged the fee.

Joint employment can lead to joint liability

The court denied FA’s request to dismiss the case prior to trial.  In doing so, it noted that a jury could conclude that Job Done was acting in FA’s interests – either directly or indirectly – when it transported employees to FA’s facility, in which case FA would be liable for the violation as a joint employer of the employees.

Unless the case settles, the case will proceed to trial against Job Done and FA.  At that point, a jury will decide if FA must pay damages to Palacio and the other employees as a result of Job Done’s wrongdoing.

Bottom line for employers

If you use a temporary staffing agency to fill positions, you could be liable for their improper pay practices and/or failure to comply with other laws.  So, what can you do to minimize that risk? Work with a reputable staffing agency and confirm that they comply with all state, federal, and local laws relating to employees.   That means that before you engage the staffing agency, you need to ask important questions about their compliance with specific laws.  You should also consider having a written contract with the agency that specifies which entity is responsible for what and includes indemnification language specifying that the staffing agency will be liable for any claims that result from the staffing agency’s violation of employment laws.

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