[5]by Petrich, Kathleen
Miller, Nash, Graham & Dunn LLP [6]
NW Law Firm
Startups and even established companies have increasingly turned to employee leasing companies, PEOs and staffing firms to supply workers. Some view this practice as a way to minimize potential liability for employment-related claims. The NLRB recently issued a decision changing its interpretation of the standard for “joint employment,” potentially opening a company using a staffing firm to liability for the staffing firm’s own violations.
In short, although it may be easier to write a check to a staffing firm and receive services in return, doing so does not effectively absolve the entity of all employment-related responsibilities. Companies need to be aware of this, act accordingly, and be very careful that they hire reputable and compliant employee leasing companies, PEO’s and staffing firms. Arrangements and the underlying contracts should be carefully reviewed for indemnification and insurance provisions.
Although the NLRB’s decision is directly applicable only to the National Labor Relations Act, it reflects a general regulatory trend towards tighter enforcement of employment-related obligations.