The regulations placed on employers by state and federal government entities are designed to protect both the labor force and the company itself, but when there is some confusion about who the employer is, things like benefits and responsibility can get muddled. This confusion often arises in situations of co-employment. This is a relationship between two or more employers where there is a potential shared legal responsibility and liability for the same employee. A situation could be someone hired by an independent contractor staffing agency and then released in contract work for a manufacturing company.
Primary Employer Responsibilities
According to the team at World wide Speciality Programs, staffing firms are most often considered a primary employer and are largely responsible for the actions of the employee. The areas of control include:
- Employee Wages
- Withholding payroll taxes
- Issuing tax reporting forms
- Providing workers’ comp and other benefit plans
- Assumes control over hiring and firing
- Mediates with employee complaints of working conditions
Mandated Employee Treatment
As a primary employer, staffing agencies are required to comply with applicable laws concerning the administration and eligibility of employee benefits. Most states require a form of workers’ compensation coverage, and there are often limits and expectations set for the amount of coverage. Staffing agencies must also ensure ADA compliance and opportunity, as well as a harassment-free and safe working environment.