Workers Comp

Issues with Temporary, Seasonal and Contract Employees

July 6, 2017

No matter what time of the year it is, many employers use seasonal, temporary, and contract workers. These workers fill an essential role, but they come with their own risks and issues especially when dealing with on-the-job injuries and workers’ compensation claims.

Injuries to workers who are not permanent employees can raise liability issues. Of course, employers want to avoid workplace injuries all together. But the challenges raised by temporary and seasonal workers are different from those of full-time, permanent employees.

Ask temp agencies the right questions
Many companies use temp agencies to help find and hire temporary workers. Most temp agencies have workers’ comp policies. You, as the employer need to make sure the agency you’re using for contract employees will cover workers’ compensation claims, should a contract worker be injured.

Other things to ask the agency:

  • What safety equipment will the agency provide for workers?
  • What about training? Some companies do their own training for specific jobs. Confirm that the agency provides basic training and/or safety education.
  • Whether the agency has policies on weather-related issues—such as high heat indexes, the outbreak of severe weather, or rules about hydration. Make sure that these issues are thought out and addressed for temporary and seasonal workers.
  • What break schedule, if any, does the agency require? Especially for physically-demanding jobs.

Keep in mind, temp agencies should be seen as business partners that your company can work closely with to ensure that both parties get the most from the relationship. Companies who use temp workers will most likely need them on a regular basis—so a strong relationship and clear communications with the temp agency is important. The sooner you find a good fit for your company, the fewer problems you will have down the road.

When an injury does occur, keep an eye on it
Even after you’ve ensured that the temp agency is covering workers’ comp claims, you should keep a close eye on any injuries suffered by a temp or seasonal worker. A string of injuries or repeats of a specific injury should be a red flag, prompting you to check your processes, adapt training or safety equipment, or take other steps to address the problem. No company wants a reputation of being an unsafe place to work, and an emphasis on safety will pay dividends with your permanent staff as well.

A tricky problem: injuries that extend past employment
Sometimes an injury to a temp or seasonal worker is not healed at the time their work ends. If a temp or seasonal employee is on a work restriction due to an injury being covered by a workers’ comp claim, and then the employee’s work ends—the season is over, or the job is complete—then the workers’ comp claim is generally still in effect.

But there is continued debate about who should be responsible for coverage in that case. Some insurance carriers argue that the injured worker’s claim should be part of unemployment coverage, assuming the employee goes on unemployment.

Some HR experts recommend finding a carrier that has volunteer return-to-work (VRTW) arrangements. These can allow an injured worker to continue to work in a job—usually in the nonprofit sector—that is less physically demanding. By having a system in place that allows a worker to fulfill a contract after injury, employers can build goodwill with workers they may want back next season, or for a future task.

In general, workers who are injured are more likely to want to return to employers who show concern for their well being after an injury. Former employees are less likely to bring lawsuits if they feel that employers care about their wellbeing. Having a policy of regularly checking in on injured workers, including temps or seasonal workers, can be a positive move for employers who will need such workers again in the future.

Be diligent when working with contract workers
Make sure the contractors you work with have up-to-date certificates of insurance. If a contractor is doing work for you and lacks such a certificate, the state will likely consider your company liable for an injury claim. Be sure to get certificates of insurance at the time the contractor is engaged.

Don’t forget that state and local governments have been subjecting contract work relationships to more scrutiny, to avoid arrangements that take a company’s worker “off the books” as far as benefits, instead making them a contract worker with the same basic tasks.

This sleight-of-hand is less common today, but companies should remember to avoid the appearance of impropriety. The relationship should be about specific tasks and direction—if a worker is self-directed and hired for a specific task, there should be no question about his or her status.

One other note, for those interested in how the regulatory winds can change: the U.S Department of Labor (DOL) recently withdrew two guidance statements on standards by which independent contractors are classified. Such moves have sparked speculation that the Trump Administration will take steps to reduce regulatory requirements in this and other areas.

Michael Miller, an attorney with Briggs and Morgan, wrote in his employment blog, “By withdrawing its previously issued guidance on independent contractors and joint employment, the DOL may be signaling more relaxed enforcement in these areas. Nonetheless, employers should continue to follow applicable law in assigning independent contractor status and assessing joint employer responsibility.”

Ensure temp-worker policies follow labor laws
HR departments should make sure that policies for temp and seasonal workers are included in employee handbooks. As with all other areas of HR, clear communication of policy is very beneficial for employee relations. Keep in mind that most labor laws, including those that cover harassment, discrimination, and workplace health and safety apply to temp and seasonal employees just the same as with any other employee.

And the Fair Labor Standards Act (FLSA), covering minimum wage, overtime pay, recordkeeping and child labor, also apply to all employees, including temp and seasonal workers.

The bottom line is that temporary, seasonal, and contract workers are important to your business’ success. Having experienced resources that can provide you with the latest information on regulatory moves and industry trends with these types of workers is always helpful.

More flexibility in work arrangements is a major trend in the United States labor market, and the more savvy and worker-friendly you can be now, the better your standing will be with employees—of all types—in the future.