Include indemnity statement in temp agency contracts

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in Employment Law,Human Resources

Q. We're a surveying company and often use temporary workers on big projects. We recently rejected a candidate sent by the temp agency. Now, the candidate is threatening to sue, saying we discriminated against her because of her accent. Can she sue us even though she was employed by the temp agency, not by us? —M.L., Maryland

A. If your company and the temp agency are “joint employers,” your company may be on the hook for employment law claims brought by the temp workers. Joint employment generally occurs when two or more businesses exercise control over the same employee. Your situation is the most common example of joint employment.

To determine if a joint-employment relationship exists, courts and federal agencies have relied on the following evidence: (1) an agreement to share employees' services; (2) an employer acts directly or indirectly in the interest of the other employer in relation to the employees; and (3) two employers share control of an employee.

To avoid such liability, make sure the agreement between you and the temp agency includes a comprehensive indemnity agreement that says the temp agency will effectively indemnify and hold harmless your company if a temp employee files a claim.

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