Q. My small business is experiencing growth and is
considering whether to use a staffing agency to fill open
positions. What are the benefits and risks involved when
contracting for such a service?
A. As the economy rebounds, more and
more businesses are turning to staffing agencies to fill open
positions. Generally, staffing agencies can help a company
find a variety of workers to meet the needs of its business,
including: (1) temporary workers for a defined period of time; (2)
temp-to-hire workers, wherein temporary workers who have performed
well are hired at the end of the period; and (3) permanent
Staffing agencies can be a useful resource for any business,
including small businesses like yours that may be short on time and
people. Staffing agencies can assume many responsibilities in
the employment process, such as payroll, benefits, hiring,
interviewing, reference checks, background checks, negotiating
salaries, terminations, unemployment benefits, and workers’
Because they often have access to a broader pool of candidates,
staffing agencies can reduce the time it takes to find a good
candidate for a particular position, which subsequently can help
overall productivity and decrease turnover. During especially
busy times, staffing agencies can find temporary workers to relieve
permanent workers from getting burned out.
The above are just some of the services offered by these types
of organizations. Before reaching out to such an agency,
however, it is important to determine the functions your company is
looking for assistance with in the staffing context. This
will allow your company to get the help it needs, without paying
for services it does not need.
It is also important for your company to understand the
responsibilities that it still has as to its contracted
workforce. One misconception is that staffing agencies will
shield a company from liability that can arise from an employment
relationship. This is not accurate as the scope of joint
employer liability continues to broaden and must be a serious
consideration when contracting with a staffing agency. For example,
under a joint employment scenario, both the staffing agency and the
company that contracts with it for workers, may be liable for
compliance with the Fair Labor Standards Act (FLSA). Earlier
this year, the U.S. Department of Labor issued detailed guidance on
liability in the joint employment context – when an employee
has two or more employers who are both responsible for compliance
under the law. Given this recent emphasis, it is advisable to
have legal counsel review any proposed contracts with a staffing
agency to ensure compliance with all applicable laws and
Published in the Union Leader
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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