Many companies now rely on contingent workers more than ever. And the trend toward using contingent labor is likely to continue.

But these workers are not employees of the companies they work for. They may be employees of a staffing agency or working as a contract employee for a specified period of time. This situation can create some murky waters regarding legal issues.


For example, if a staffing agency has been found to be discriminating against workers, can the company that has a contract with the agency be held liable for discrimination as well? The answer is yes. In one case, a staffing agency used code words to identify people by race and gender. They used the term hockey player for whites, basketball player for African-Americans, and chocolate cupcake for female African-Americans. The code words were attached to applications sent to companies.

The staffing agency received a significant fine for this practice. But the employers, who chose workers using the code words, are also legally implicated and could be sued. The moral of the story here is that companies should not collaborate with staffing agencies to discriminate against workers. Moreover, legal experts say the companies also need to spell out in their contracts that the agency will cover any legal expenses and settlement costs if their discrimination results in a lawsuit.


Another misconception about contingent workers is that they cannot qualify for benefits from a company. But this is not always true, and can depend on their agreement with a company and how long they have worked there. Contingent workers also have the same rights as other workers when it comes to wage and hour laws.

Full-Time to Contingent

Many company officials also believe that there is little difficulty in changing someone who is a full-time worker to a contract employee, involving just a simple name change. But there is more to it than that. Simply changing titles or names does not really convert someone into a contract worker if that person is still working under someone at the company and drawing a paycheck from the company.

The Internal Revenue Service may need more proof than that to convince them that the person is indeed a contract worker.

If your company is looking for contingent workers, Winston Resources can help you. With Winston, you can be sure the hiring process is done right, with attention to all legal details. Winston is thorough and efficient. Give us a call today.

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