OSHA Sharpens Focus on Businesses’ Obligations to Contingent Workers

By Robert S. Nichols and Amber K. Dodds Dec 2, 2015
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Employment lawyers regularly advise businesses to avoid treating contingent workers, such as temporary or leased workers, like they are employees of the business. Specifically, those attorneys worry about a company subjecting itself to employer-type legal obligations for those contingent workers, such as leave and wage and hour requirements.

When it comes to occupational safety and health, however, this approach can lead to penalties under the Occupational Safety and Health (OSH) Act. Specifically, the Occupational Safety and Health Administration (OSHA) takes the position that the host company has safety-related legal obligations with respect to temporary and leased employees, just as if that host business directly employed these workers.

Over the past two years, during workplace inspections, OSHA compliance officers have increasingly focused on identifying whether the employer has failed to take appropriate steps to protect contingent workers and if it has maintained OSHA-mandated injury records related to injuries of those workers.

New Emphasis on Safety of Contingent Workers

The Obama administration has taken a much more aggressive position on OSHA enforcement in general. One specific area of tougher enforcement has been assuring that businesses properly protect temporary and leased workers. In a February 8, 2013, speech, David Michaels, the assistant secretary of labor for occupational safety and health, expressed significant concerns with many businesses’ failure to take proper steps to protect temporary and other contingent workers. Michaels explained in that speech: “The growth of the contingent workforce, the number of vulnerable workers in our most dangerous occupations, the increasing transience of workers in occupations where we once saw much more stability—[are] all present challenges that previous administrations did not have to face. We must continually renew our efforts to ensure that workers are empowered to get the information they need about the hazards they face—and workers must have the ability to use the rights they are entitled to under the law without fear of retaliation.”

Approximately two months following that speech, on April 29, 2013, OSHA launched its Temporary Worker Initiative (TWI). At the time, the agency explained that the “purpose of this initiative is to increase OSHA’s focus on temporary workers in order to highlight employers’ responsibilities to ensure these workers are protected from workplace hazards.”

Most importantly, in announcing that initiative, OSHA warned employers that the agency generally “will consider the staffing agency and host employer to be ‘joint employers’ of the workers.” In justifying the position that the host business and staffing agency are generally joint employers, OSHA has observed that typically “the staffing agency … controls workers’ paychecks and selects the host employer location where the employee will be sent [and] [t]he host employer, in turn, assigns the particular work to be done each day and controls the operations of the physical workplace.” OSHA warned that because the temporary agency and host business are joint employers, both entities have responsibilities to the worker under the OSH Act.

OSHA has further emphasized that when the agency refers to a “temporary worker,” it is not only referring to workers who are assigned to the client company for a matter of days, but also workers provided by the staffing company on a longer-term basis, commonly referred to as leased workers.

Businesses must assure that temporary workers receive all appropriate training before the start of an assignment. For instance, if the employer’s regular employees go through training programs before being allowed to perform a certain job position or job function, then a temporary worker must undergo the same training, either through the temporary agency or the host company, before the worker can begin performing the job.

OSHA therefore has instructed through the TWI that the two businesses “must work together to ensure that OSH Act requirements are fully met and that the temporary worker is provided a safe workplace.” In explaining how the staffing agency and host company should divide responsibilities for assuring a safe workplace, OSHA has directed that the division of responsibility needs to be based on the individual circumstances and may be clarified by “their agreement or contract.”

While both the temporary agency and host company have responsibilities, OSHA has indicated that typically, because the host company controls the workplace and understands the specific hazards, most responsibilities for providing a safe workplace fall upon the host company.

As for which entity will be subject to citations from OSHA if a worker is exposed to unsafe conditions that violate OSH Act standards, the agency has emphasized under the TWI it will “consider issuing citations to either or both the employers, depending on specific facts of the case.” As a general rule, when a worker is exposed to unsafe conditions in the workplace, the host business is almost always cited and sometimes, but not always, the staffing agency is also cited for the infraction.

OSHA Issues Key Record-Keeping Guidance as Part of TWI

Since the start of its TWI in the spring of 2013, OSHA has issued three different bulletins intended to educate employers on key issues associated with temporary workers.

While each of these bulletins is important, the first bulletin, concerning how record-keeping is handled with regard to temporary workers, is particularly key because so many employers are confused about their record-keeping responsibilities with regards to temporary staff. Additionally, the agency’s position on record-keeping for work-related injuries and illnesses associated with temporary workers can sometimes be counterintuitive. Specifically, OSHA instructs that, even though the parties may treat the staffing company as the legal employer of the worker, it is the host employer that normally is the party “responsible for recording the injuries and illnesses of temporary workers.”

In its bulletin on record-keeping issues for temporary workers, the agency reiterated its long-standing rule that where multiple businesses are involved, an employee’s recordable injury or illness should only be recorded by one employer. Because “[e]mployers must record injuries and illnesses of temporary workers if they supervise such workers on a day-to-day basis,” generally it is the host company that must record the injury. In its bulletin, the agency explains specifically that day-to-day supervision occurs when “in addition to specifying the output, product or result to be accomplished by the person’s work, the employer supervises the details, the means, methods and processes by which the work is to be accomplished.”

OSHA’s position on record-keeping raises an important point about contingent workers generally and the responsibilities of a host company: Specifically, if the worker is not part of a typical temporary or other staffing arrangement where the host company is supervising the employee’s work, but rather is employed by a contractor that has a supervisor who actually supervises the employee’s work directly at the worksite, as would be the case with a true independent contractor (such as most electrical or plumbing contractors), then OSHA’s view of the host company as a joint employer would not be applicable. In this instance, the employee would only be an employee of the contractor.

Of course, with traditional temporary or leased employee arrangements, this direct supervision by the contractor does not exist, but rather the host company instructs the worker on what is to be done during the day. In this instance, the staffing agency and host company are joint employers and it would be the host company’s responsibility to record workplace injuries and illnesses.

Also with temporary staffing arrangements, when a workplace incident results in a fatality, hospitalization, eye loss or amputation, then the host employer must report that incident to OSHA in a timely manner, as required by the agency’s applicable reporting requirements.

Importantly, in October 2015, OSHA issued a new interpretation letter providing further guidance about the circumstances under which the host company must record injuries or illnesses for a temporary worker. In that letter, OSHA was responding to an inquiry by a company that indicated that it utilized contingent workers in a manufacturing environment where the staffing agency actually has supervision onsite.

The business making that inquiry further explained that the staffing agency is responsible for all personnel matters involving the workers including, but not limited to, leave requests, reporting injuries and illnesses, compensation, benefits, discipline, and drug testing. The company asked whether, when the host company effectively shares onsite supervisory responsibilities with the staffing agency, it is still the case that the host company must record on-the-job injuries and illnesses sustained by those contingent workers.

In that October 2015 letter, OSHA concluded that, even though the staffing company had onsite supervisory staff, the host company was still actually assigning the “daily tasks” to the contingent workers. As a result, OSHA found that the host company retained responsibility for OSH Act record-keeping with regard to those workers.

PPE Guidance

OSHA issued a second guidance bulletin as part of the TWI in March 2015.

In that bulletin, OSHA first reiterated that personal protective equipment (PPE)—such as safety glasses, hard hats and respirators—is key to the safety of workers and must be provided to employees consistent with the PPE hazard assessment that employers are required to conduct under OSHA regulations. OSHA emphasized that under the PPE regulations, employers are required to pay for the cost of PPE and cannot make employees, directly or indirectly, shoulder that expense.

After reviewing these basic principles of PPE in the bulletin, OSHA directed that in the case of temporary workers, it is actually the host company, and not the staffing company, that has “primary responsibility” for “selecting, providing and ensuring the adequate use of PPE.”

Whistle-Blower Protection Guidance

The third and final bulletin issued by OSHA under the TWI, also issued in March 2015, relates to whistle-blower protection rights.

In that bulletin, the agency began by reiterating that under Section 11(c) of the OSH Act, workers are protected from retaliation in any form for reporting concerns either externally to OSHA or internally, formally or informally, regarding any safety concern, including reporting an on-the-job injury or illness. The agency emphasized that the protections against retaliation apply equally to contingent workers and the company’s regular employees. For instance, if the host company ends the assignment of a temporary worker in retaliation for protected activity, such as the worker reporting an injury or unsafe condition, that host company has violated Section 11(c) of the OSH Act.

Key Compliance Concerns

Key takeaways for staffing agencies and host companies based on OSHA’s TWI guidance include:

  • For OSH Act purposes, the staffing agency and host company are generally considered to be joint employers of the workers supplied.

  • While the staffing agency and host company can be, and in many circumstances are, both cited for violations potentially impacting the safety of contingent workers, because the host company controls the workplace and generally supervises the work, that host company bears primary responsibility for OSH Act compliance and the safety and health of the workers.

  • Consistent with that same concept, it is the host company that should be recording workplace injuries and illnesses for temporary and other contingent workers (assuming the host company is providing day-to-day supervision for those workers).

  • Temporary or leased workers should not be confused with employees of independent contractors where the contractor has one or more supervisors onsite who are actually directing the work, including the specifics as to how the work is to be performed. With this situation, no joint employment relationship exists. Notably, however, the host company conceivably could still be liable for an unsafe condition at the worksite based on OSHA’s multiemployer citation policy.

Robert S. Nichols is a partner in the Houston office of Bracewell & Giuliani, and Amber K. Dodds is an associate in the San Antonio office of Bracewell & Giuliani.

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