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Contingent Workers
The term "contingent workforce" refers to the nearly one-quarter of this country’s workers who are part-time, temporary or seasonal, secured through temporary agencies, or under employee leasing arrangements. Contingent workers may be treated differently than permanent workers under some California and federal labor laws. Direct employees include temporary, seasonal and part-time employees. Non-direct employees include workers who are employed through temporary staffing agencies, leased employees and independent contractors. The distinction between direct employment and non-direct employment is often blurred by the details of the arrangements and the laws or court decisions designed to protect the workers’ interests.
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Short-Term and Part-Time Employees: Short-term employees, such as temporary, seasonal and specialized employees, are employed for a limited period of time or an identified project. The law does not specify a duration of time after which a short-term employee becomes a regular employee. Specialized employees are those who are brought in for a short time due to their expertise in a particular area. They may be hired on a short-term basis to handle a project outside the employer’s normal realm, such as setting up a computer system or leading an employer’s efforts to rezone a piece of property on which it wants to build a new plant. Part-time employees are those who do not work enough hours to meet the employer’s definition of full-time. There are generally no legal definitions of full-time or part-time, so you can set the threshold number of hours.
Health Care Staffing: Employment agencies that provide temporary certified nurse assistants (CNAs) or licensed nursing staff for long-term health care facilities are subject to special requirements. Prior to referring CNAs or licensed nursing staff, an employment agency must perform all of the following actions:
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Leased Workers: Employee leasing firms handle much of the responsibility that the law imposes on employers, allowing you to spend more time on business itself. But an employer who leases employees can lose much of the control necessary to avoid employment-related litigation. Courts have often found joint employer status between the leasing firm and the organization leasing an employee. Joint employment status eliminates the benefit of being relieved of employment law responsibilities, and creates liability, where often there is little control. If you lease an employee, you can be found jointly liable where the leasing organization did not adequately address the issue of sexual harassment by failing to provide an anti-harassment policy or inadequately responding to an allegation of harassment.
Benefits and Contingent Workers: Two court decisions have indicated that, without careful planning on your part, temporary and leased employees can become eligible for employee benefits.
In Burrey v. Pacific Gas & Electric Co., the Ninth Circuit Court of Appeals found that temporary or leased employees may be common-law employees entitled to participate in certain employee benefit plans. In this case, individuals were leased to PG&E through a series of employment agencies for more than a decade. They used PG&E’s equipment, including computers, telephones and email. They were sent to the same training classes as PG&E employees, used PG&E business cards and letterhead and drove PG&E cars. Although they were paid by the employment agencies, travel expenses were reimbursed by PG&E. The court held that unless all contingent workers are specifically excluded from an employee benefit plan, they can become entitled to benefits under the theory that they are common-law employees. The court sent the case back to the trial court to determine if the particular individuals involved met the test of being common-law employees. The Ninth Circuit Court of Appeals found that if the individuals were determined to be common-law employees by the trial court, they should be retroactively eligible for medical, pension and retirement plan benefits, which they had been denied throughout their tenure with PG&E. In Vizcaino v. Microsoft Corp., a Ninth Circuit Court of Appeals panel held that current and former temporary employees of Microsoft Corporation should be entitled to the same benefits as were the misclassified independent contractors. Because of the potential impact of these cases on employers who use contingent workers, employee handbooks and benefit plans should clearly define which individuals are eligible for participation in organization benefit plans. Do not treat contingent workers in the same manner as regular employees. Consult legal counsel before using contingent workers on a long-term basis (more than one year). Unions and Contingent Workers: According to the National Labor Relations Board (NLRB), temporary employees have the right to join unions. The ruling arose from an NLRB regional director’s earlier decision allowing an employer to exclude temporary employees from the organization’s regular employees’ bargaining unit. The regional director held that because employees supplied by a staffing agency were jointly employed by both organizations, the temporary employees could not join with the regular employees to bargain without the consent of the staffing agency. On appeal, the NLRB found the temporary employees worked side-by-side with regular employees, performed the same work, kept the same hours and were subject to the same supervision. The NLRB found the temporary and regular employees shared a “sufficient community of interest to constitute an appropriate unit.” As a result of the ruling, for bargaining purposes, temporary employees are considered to be employees of the temporary agency’s client. When the temporary employee is jointly employed by both the agency and the client, the temporary employee, without the consent of the agency or client, can:
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