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The rise in the use of contract and temporary workers raises questions about who is responsible for their safety in the workplace.
But employers who use these workers at their work sites would be unwise to assume that they can offload their responsibility to protect them from injury and illness simply because they are not directly employed by their companies, experts say.
“I think that it’s attractive for a lot of companies to have outsourced labor, mainly because it creates a lot of savings for the company,” said Brian A. Richardson, Richmond, Virginia-based director of the litigation practice group at McCandlish Holton
P.C. “If you don’t have to account for payroll expenses and other employment considerations, there’s a lot of savings in having those issues outsourced. From a comp perspective, you are also shifting some liability toward other entities that are then covering the workers comp for those employees.”
Using contractors, temporary workers and other nonpermanent employee situations can have workplace safety and workers compensation implications, according to experts.
“The implications can be significant. Using these workers increases the potential for serious injuries and fatalities due to the workers’ lack of familiarity with the work site, the hazards, etc.,” said Paul Vescio, Pittsburgh-based senior risk consultant at Aon Global Risk Consulting. “For the staffing agency, (there are) higher workers compensation claims rates, turnover, and related costs. There is also the potential for (U.S. Occupational Safety and Health Administration) fines for not providing adequate training or not protecting workers from hazards.”
The responsibility for contractors’ safety on a work site falls on both the employer and the staffing company, experts say.
“The industry is slowly coming around to the fact that both the staffing companies and their client employers share responsibilities for safety,” said Mr. Vescio. “Staffing companies have a responsibility to provide very basic general safety training, and their host employers are expected to provide more in-depth, job-specific safety training.”
The question of who is responsible for the worker’s comp costs when one of these workers are injured on site is trickier. Generally, the staffing agency would be responsible for an injured temporary or contract worker, but there are times when responsibility could fall on the host employer, say experts.
“The issue really comes up in those situations where you think you are outsourcing things and the person you have outsourced it to may not have insurance coverage,” said Mr. Richardson.
In Virginia, statutory employers are deemed to be the employer for the purposes of workers comp when the actual employer does not have coverage, he said.
“You can go down a lot of different scenarios where an employer thinks he or she is shielding themselves from liability, yet ends up having to be saddled with liability if coverage is not found from the actual employer,” he said.
In cases where the contractor or temporary worker creates a hazard that causes an injury to an in-house employee, responsibility for workers comp lies with the employer of the injured worker regardless of how the injury occurred.
“There may be opportunities to recover some of the costs if a third party is negligent, but this would be case by case,” said Mr. Vescio.
Safety hazards that result from outsourced labor often happen due to lack of safety training for these workers, experts say.
“As a host employer, you have to be able to recognize injuries, have good reporting systems, encourage reporting, really specify the training. A lot of times what you see is, ‘OK, I’ve got somebody here on site, they are here for maybe two days, I want to get them to work as soon as possible.’ So, you may not give them as full of a training that you would your own employees that will be there longer term,” said Amy K. Harper, Seattle-based Journey to Safety Excellence and workplace strategy director at the Itasca, Illinois-based National Safety Council.
Employers can protect themselves and create a safe work environment by having a contractor management program for safety.
“Have a program in place that has a policy that says that all employees are to be treated as our own from a safety and training standpoint,” said Ms. Harper.
“The Occupational Safety and Health Administration regulates all workplace safety and they impose those obligations without regard to what anyone may say in a contract,” said Ben Huggett, Philadelphia-based shareholder, and co-chair of the national workplace health and safety practice at Littler Mendelson P.C.
“Where OSHA has a problem is … there have been a lot of unfortunate circumstances where the host employer isn’t addressing any safety and health for those folks because they are not their direct employees,” said Mr. Huggett.
An OSHA representative could not be reached for comment.