Many benefits & protections lost in new, joint-employer economy

Jan 22 2016

Since the Great Recession (and before it, to some extent), American companies have been moving away from hiring and retaining full-time employees. Instead, American workers are increasingly being treated as temporary, part-time and expendable. Companies hire workers through temp agencies, with the understanding that the work could end at anytime and that the temp agencies would ultimately be responsible for most problems that arose.

This is often a good way for companies to do business (from a financial standpoint), because they can scale up and down easily and don’t need to invest as much money in their workers. But more often than not, this arrangement does not benefit workers. Instead, it just complicates matters of liability in everything from wage-and-hour violations to workplace accidents.

The Department of Labor recently issued guidance aimed to address issues of employment law violations (such as failure to pay minimum wage or overtime pay). The DOL believes that this “joint employment” model can lead to more problems and less accountability for employment law compliance.

And while the DOL guidance did not specifically address it, workers’ compensation is often another casualty of the joint employment model. Generally, companies are not required to provide workers’ compensation coverage to workers labeled as contractors. That coverage is usually supposed to be provided by the staffing agency or temp agency, but these firms are not always reputable or in compliance with the law.

Companies should be willing to invest in their workers the same way that workers invest in their jobs. That being said, the temporary, expendable-worker economy may not be fair or good for morale, but it likely won’t be going away any time soon. If you have suffered a workplace injury while in a joint-employment situation, you may want to discuss your case with an experienced workers’ compensation attorney.