EEOC Issues Guidance Regarding Temporary and
Other Contingent
Workers
By: Janet Hedrick, partner at Vedder Price Kaufman & Kammholz,
located at 222 N. LaSalle St. in Chicago.
She may be contacted at 312-609-7742 or by e-mail at
jhedrick.vedderprice@mcimail.com
| The EEOC recently issued an Enforcement Guidance on the Application of
EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and
Other Staffing Firms (the “Guidance”). The Guidance appropriately
warns that using individuals hired and paid by a staffing firm does not
automatically relieve a company of its obligations under the federal employment
discrimination statutes. Rather, Title VII of the Civil Rights Act of 1964
(“Title VII”), the Americans with Disabilities Act (“ADA”),
the Age Discrimination in Employment Act (“ADEA”), and the Equal
Pay Act (“EPA”) may apply.
Coverage As an initial matter, these four laws exempt companies that have fewer than the requisite number of employees. Title VII and the ADA apply to any employer with a minimum of 15 employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, while the ADEA applies to any employer with a minimum of 20 employees within the same time frame. The EPA applies to any employer who has more than one employee. For purposes of determining coverage, says the Guidance, a company must count every worker, including staffing firm workers, with whom it has an “employment relationship” (see below).
“Employee” or Independent
Contractor? Assuming the requisite number is met, the federal anti-discrimination laws apply to a staffing firm worker when the worker is an employee as opposed to an independent contractor and the company for whom the work is performed has “the right to control the means and manner” of the individual’s work performance. No shorthand formula, such as the label used to describe the worker, determines this issue. Instead, says the EEOC, all aspects of the relationship must be examined. Factors that suggest the worker is an employee of the company include the following:
· The company has the right to control when, where, and how the worker performs the job;
These factors are not conclusive or exhaustive. Rather, circumstances must be examined on a case-by-case basis to determine whether an employer-employee relationship exists for coverage purposes. The fact that the staffing agency may also have some control over the worker does not affect a company’s coverage by the anti-discrimination laws. Indeed, according to the EEOC, a “client of a temporary employment agency typically qualifies as an employer of the worker during the job assignment along with the agency. This is because the client usually exercises significant supervisory control over the worker.” In the event both a company and its staffing firm exercise control, they are covered as joint employers.
Liability for Discriminating Against a
Nonemployee Even if a company with the requisite number of employees under the federal anti-discrimination laws does not qualify as a worker’s employer, it can still be liable for unlawfully discriminating against the worker, according to the Guidance. The anti-discrimination statutes not only prohibit an employer from discriminating against its own employees, but also prohibit it from discriminatorily interfering with an individual’s employment opportunity with another employer. Accordingly, assuming a company is subject to the federal anti-discrimination laws with respect to its own employees, it is prohibited from interfering on a discriminatory basis with the worker’s employment opportunities with the staffing firm. For example, even if a staffing firm worker is not a company employee, the company must assign jobs in a nondiscriminatory matter. Thus, assuming the company has enough employees to be covered under the applicable anti-discrimination law, the company that rejects or adversely treats a worker for discriminatory reasons is liable either as a joint employer or as a third-party interferer.
Liability: Allocation of
Remedies Where both a company and its staffing firm have violated any of the anti-discrimination laws, they are “jointly and severally liable” for back pay, front pay, and compensatory damages, including pecuniary loss and emotional distress. As a result, either a company or its staffing firm can be held responsible by itself for the full amount of these damages. On the other hand, punitive damages under Title VII and the ADA, and liquidated damages under the ADEA, are individually assessed against each party based on their respective degrees of malicious or reckless conduct.
Conclusion As the EEOC Guidance makes clear, an employer who uses temporary workers cannot assume it is thereby insulated from EEO liability. The same EEO practices should be applied to all employees, temporary and regular. |
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Janet Hedrick is a partner at Vedder Price Kaufman & Kammholz, located
at 222 N. LaSalle St. in Chicago.
She may be contacted at 312-609-7742 or by e-mail at
jhedrick.vedderprice@mcimail.com
The information offered here is not intended as legal advice or opinion applicable in specific circumstances. You are urged to consult an attorney concerning your particular situation. Under professional rules, this article may be regarded as advertising material.
Copyright © 1998 - Vedder Price Kaufman & Kammholz. Reprinted with permission. All Rights Reserved
