Leasing employees may be convenient, but it comes with some risk—including unexpected liability for workplace injuries.
If another organization’s employee gets hurt while working for you, you may be directly liable for the injury, even if he is collecting workers’ comp through his nominal employer.
Recent case: Jerome Smith worked at the Jet Propulsion Laboratory (JPL), but was employed by Santa Barbara Research, which supplies hourly labor to Caltech, which manages the JPL under its own contract.
Smith injured himself and collected workers’ comp—and then sued Caltech for negligence. Caltech claimed Smith could only collect workers’ comp, portraying itself as Smith’s employer. The court said it wasn’t and let Smith’s lawsuit proceed. (Smith v. Dynalectric, et al., No. B228770, Court of Appeal of California, 2nd Appellate District, 2011)