Many businesses bring on extra help for temporary or seasonal needs, and some even do all their hiring from the ranks of such workers, a practice known as “temp to perm.” Often the easiest way to find this kind of help is to contract with a staffing agency. But not all companies understand the details of the employment relationship in such situations. In particular, who is the employer, the borrower or the lender?
The answer to that question matters a lot when things go wrong, ranging from a workers compensation injury to an employee lawsuit over alleged discrimination. In the case of workers comp, Connecticut has a statute that provides the answer: the entity that lends an employee to another business is deemed to be the sole employer of the loaned employee, even if he or she is injured while working for the borrower.
Interestingly, a recent court case holds that answer still applies in a case of workers comp retaliation under Section 31-290a. That means that if a staffing agency temp has a workers comp injury while working for one of the agency’s customers, and the customer tells the agency not to send that employee back after recovering because he or she is accident prone, the injured employee can’t bring a claim of workers comp retaliation against the customer.
On the other hand, the same judge ruled that a borrowed employee can file a discrimination claim against the borrower under the Fair Employment Practices Act, provided two tests are met. One, the borrowed employee is paid directly by the borrower, and two, the borrower has the right to control the means and methods by which the employee performs the job.