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Be Careful with Co-employment Arrangements

Using temps and part-time workers from a staffing agency is one way for facility managers to tap an external resource pool. Co-employment arrangements make sense and can be a fairly straight-forward staffing solution, but there are many nuances to the laws and regulations that are important in co-employment but do not have to be considered in outsourcing arrangements.

Here are some aspects of co-employment to carefully consider, as discussed by Stormy Friday, president of The Friday Group.

  • Length of time as temporary employee. The primary issue surrounding co-employment status is the length of time the temporary staff person is on site with the client organization. It's easier to keep a temporary employee who is working well than constantly have to change individuals. However, legal experts recommend restricting temporary staff to 1,000 to 1,500 hours per year and establishing a mandatory 90-day break in service before an employee is allowed to return. This policy makes it clear to temporary staff that they are not "permanent" employees of the organization.
  • Safety on the job. In a co-employment situation, the FM department needs to maintain records of illnesses and injuries of any temporary staff the department has supervised in the same way it does for permanent staff. Failure to maintain these records opens the door to a potential OSHA violation because the party in direct control of the workplace is responsible for worker safety. The temporary staffing firm will only be in violation if it knew the job site was unsafe before the individual was placed.
  • Wages and hours worked. The Department of Labor has held that a temporary staffing firm has prime responsibility for tracking hours their staff work and paying the proper overtime. With co-employment, however, workers are considered joint employees of both the firm and the client, so clients may be liable for overtime pay.
  • Worker civil rights. Co-employment provides the same worker civil rights coverage for temporary staff as for permanent employees. Customer organizations are not exempt from civil rights compliance that extends to prohibition of discrimination under measures such as the Americans with Disabilities Act.
  • Testing for pension plan tax qualification. Although temporary staff provided through a co-employment arrangement are not entitled to employee benefits, they must be counted for coverage testing purposes if they perform more than 1,500 hours of service in a given year.
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