Avoiding co-employment
Staffing firms and their clients should avoid co-employment or dual employment status for temporary workers, industry leaders say. Co-employment status is defined as an employment relationship where two or more employers control some aspect of a worker's employment conditions. If co-employment status is proven in litigation, both the clients and the staffing firm can be responsible if employment laws are broken. Here are some tips for avoiding co-employment status:
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Give the staffing firm control of the workers, their pay, benefits and discipline
Let the staffing firm decide worker assignments
Be able to articulate a good reason to use temps, such as cost savings
Review the staffing firm's performance, not the performance of individual workers
Consider asking workers to sign waivers stating they work for the staffing firm and not the client
Be cautious of hiring large groups of temporary workers as full-time workers at once. Instead stagger the hirings to avoid them being considered a class
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SOURCE: Thomas Hubbard of Adecco Staffing
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A federal lawsuit filed by two workers against a Las Vegas staffing firm and several hospitality companies questions the legal responsibility of clients using a temporary labor force.
George Estes and Raquel Medina Benevidies filed a lawsuit in U.S. District Court in June alleging the staffing firm they worked for, Premier Staffing Solutions, didn't pay them overtime, minimum wages and other wages under federal and state laws. The lawsuit is seeking class-action status and could potentially include hundreds of plaintiffs.
Leon Greenberg, an attorney for Estes and Benevidies, declined to comment on the lawsuit.
The lawsuit also names as defendants several of the company's hospitality clients, including MGM Mirage, The Venetian as well as its parent company, Las Vegas Sands Inc., Mandalay Resort Group and the Ritz-Carlton Hotel Co. LLC.
Other defendants in the lawsuit include United Temps Inc., United National Maintenance Inc. and United Supply Services Inc. Those companies operate under United Service Companies, which offers a variety of temporary staffing services for security and janitorial functions.
The lawsuit also names Joey and Danielle Ellis, owners of Premier Staffing Solutions, as defendants in the suit. Neither the Ellises nor Doris Nehme would comment on the lawsuit.
Representatives of MGM Mirage, The Venetian, Las Vegas Sands, Mandalay Resort Group and the Ritz-Carlton at Lake Las Vegas all declined to comment on the pending litigation.
The lawsuit alleges that the clients benefited from Premier Staffing Solutions' "illegal conduct in that they were able to purchase, pursuant to their service contracts, 'outsourced' labor for their business operations at a cost substantially below what they would otherwise have had to pay for such labor."
A rate agreement between Premier Staffing Solutions and The Venetian, included in court documents, indicates that the casino paid the company $8.90 per hour for workers who performed banquet set-up duties. The workers often worked on temporary events.
Other jobs the workers performed at the hospitality properties over the past three years included various clean-up functions, food service, security, customer assistance and parking lot management, "under the direct supervision and control of The Venetian defendants and/or the client corporation defendants," the lawsuit said. The Venetian defendants and client corporation defendants both refer to the gaming/hospitality properties.
In a Sept. 7 court filing, Premier Staffing Solutions denies most of the complaint's allegations. The lawsuit also alleges that the plaintiffs are barred from making their overtime and minimum wage claims because they worked on a "fluctuating work week."
In a motion to dismiss filed by The Venetian on Sept. 13, the casino denies it was an employer or joint employer of Premier Staffing Solutions' temporary workers. The casino alleges Premier Staffing Solutions had control over the employees' work schedules and rate of employment, as well as the power to hire and fire the workers and maintained their employment records.
The Venetian alleges in its motion that the service agreement between it and Premier Staffing Solutions specifies that The Venetian isn't the employer of the workers. The service contract states, "The customer agrees not to hire, consult with, or in anyway take advantage of the services of a Premier Staffing Solutions employee on a permanent, part-time or sub-contract basis without the prior written consent of Premier Staffing Solutions management."
Mandalay Resort Group also filed an answer and cross-claim to the lawsuit on Sept. 7. In it, Mandalay alleges that it never had a contract with either Premier Staffing Solutions or United Service Companies to provide labor or any other services, and that it didn't break any labor laws. The counterclaim was filed against Premier Staffing Solutions and United Service Companies alleging that even if the companies had provided labor services for Mandalay, the staffing agencies should be responsible for paying regular and overtime wages. The cross-claim also alleges that Premier and United are responsible for Mandalay's attorneys' fees and costs.
In a Sept. 7 answer filed by MGM Mirage, the company denies it is an employer of the plaintiffs and that the plaintiffs have been fully compensated.
In a Sept. 13 cross-complaint against Premier Staffing Solutions and United Service Companies by the Ritz-Carlton denies it was an employer of the plaintiffs. It also states that Premier Staffing Solutions and United Service Companies are required to ensure their workers were paid correctly. The cross complaint alleges that the Ritz-Carlton is eligible for restitution and attorney's fees from the cross defendants even if the plaintiffs are unsuccessful.
Ann McGinley, a professor of law at the William S. Boyd School of Law, said it is important for the client companies to disclaim any allegations of dual employment. She said if dual employment is proven by the plaintiffs, the client companies can be held accountable for any labor law violations of the staffing firms.
"It is all a question of who has control over the employee. If casino employees are being supervised or controlled by casino supervisors then, they're employees of the casino as well. So it's what we call a joint employment situation. The casino is responsible for making sure the staffing agency isn't paying them in an illegal way," McGinley said.
Estes and Benevidies allege in their lawsuit that the hospitality companies were also their employers.
Staffing industry spokesman Thomas Hubbard, of Adecco Staffing, said the key to protecting clients from employment litigation is by avoiding anything that can be construed as dual or co-employment. He said it should clearly state in the service contract that the staffing firm is the employer and not the client company.
"The best way to avoid co-employment is to give the staffing firm control. Let us make the hiring decisions, let us make the termination decision," Hubbard said.
Alana Roberts covers courts and labor relations for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached by e-mail at alanar@lasvegassun.com or at (702) 259-4059.