SIA: understanding co-employment liability laws.

January 25, 2021

While more employers seek to use temporary talent, many let contingent workers go after a predetermined number of hours to avoid the risk of co-employment, such as potential litigation surrounding benefits practices.

In her recent article in The Staffing Stream, Scotty Parrish, senior vice president, client services total talent solutions, at Randstad Sourceright explains that the legal concern could be traced back to the lawsuit of Vizcaino v. Microsoft in 1996, when independent contractors working for Microsoft sued to be included in Microsoft ’s benefits plan. Microsoft ultimately settled for $97 million, an expense that could have been avoided with exclusionary language in their benefits plan.

Many businesses to this day remain apprehensive about using outside contract workers and being liable for benefits in the future, and many employers resort to term limits in order to mitigate those risks. This practice is not only unnecessary but can be harmful both to workers and business efficiency and productivity.

“In general, the fear of co-employment is unwarranted,” says Jamie Kitces, associate general counsel at Randstad USA. “There are some broad guidelines that talent leaders need to be aware of, but organizations can mitigate risk by working with reputable staffing firms.”

Having a staffing firm manage contingent talent will help to reduce liability exposure, while also making the most of a flexible, on-demand workforce. The firm absorbs the risk for the employer, who benefits from established practices and expert knowledge of labor law.

Read the full article in Staffing Industry Analysts’ The Staffing Stream for more insights on mitigating the risk of co-employment and retaining contingent talent. You can also download the MSP Playbook to learn how your company can benefit from an agile approach to working with contingent talent.

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