Temps May Have Multiple Employers

The Fourth Circuit Court of Appeals recently ruled that a temporary agency employee could be deemed an employee of the customer company as well as the temporary agency. The Fourth Circuit adopted a hybrid test and set forth nine factors that should be considered to determine if an employee is jointly employed by two or more entities. The nine factors are:

1. Authority to hire and fire the individual;
2. Day-to-day supervision of the individual, including employee discipline;
3. Whether the customer furnishes the equipment used and the place of work;
4. Possession of and responsibility over the individual’s employment records, including payroll, insurance, and taxes;
5. The length of time during which the individual has worked for the customer;
6. Whether the customer provides the individual with formal or informal training;
7. Whether the individual’s duties are akin to the duties of the customer’s employees;
8. Whether the individual is assigned solely to the customer; and
9. Whether the parties intended to enter into an employment relationship.

The court made clear that none of the factors are dispositive, but that control is still the “principal guidepost” in making the determination. However, the court noted that the first, second and third factors were the most important in the analysis.

Based on the analysis of the factors provided by the court, prudent employers should note the following:

• Authority to hire and fire can be found if the customer employer directs the temp agency to fire or discipline the employee even if the temp agency is actually the one that carries out the termination.
• Temp employees working “side by side” with the company’s employees and performing the same tasks as the company employees is also an indicator of control.
• Even though temp employees may wear a different uniform from the company employees, that is not dispositive of control.
• Temp employees performing tasks essential to the business of the customer company such as producing goods or services core to the business also weighs in favor of control.
• Although the temp agency may handle dispersal of paychecks, official terminations and employee discipline, this does not guarantee that the temp agency is the sole employer for purposes of liability.