April 2022 Staffing industry overview on compliance and risk management.
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The Staffing industry needs to adapt to regulatory changes and market forces continuously. Lia Elliot Esq., Owner/Partner of GC Staffing, shared great advice during her Lunch and Learn with the Illinois Staffing and Search Association.
Here are the Top 3 takeaways!
#1. Understand your Insurance Coverage. Annually review your insurance coverage with your broker and be very intentional. The two following types of insurance are often overlooked or misunderstood.
Cyber Liability Insurance – Staffing firms are especially vulnerable to cyber threats due to the high volume of personal information collected and stored. Your insurance company will also be a valuable resource to help you with steps to take if/when you find yourself in an identity theft situation.
Employment Practice Liability Insurance – Your entire staffing business revolves around employment practices, and EPLI coverage is critical as it protects against wrongful termination, discrimination, and workplace harassment. In addition to securing coverage, it’s essential to understand the reporting and claim management process to follow in the event of a claim. Finally, know that some policies will include compliance $ to the insured as proactive resources, so check with your broker to see if you’re eligible.
#2. Arbitration Agreement (Class Action Waiver) – Lia recommends you put an arbitration agreement in place with all contingent and temporary staff. It’s the only tool available to employers to mitigate the class action risk that staffing firms face today. Class action suits are often related to Wage and Hour issues. These suits could consist of miscalculated overtime or misclassification of employees. There are also many class-action suits regarding the Fair Credit and Reporting Act for any business running background checks, credit reports, and educational verifications.
Note: Class Action and Collective Action are typically excluded from insurance coverage, and these claims can be catastrophic. The average settlement cost in 2020 was between 8-9M, plus attorney fees. Compared to the cost of drafting and including an arbitration agreement into your onboarding packet, this is a smart addition to your process.
GC Staffing wrote an article on “Shield your Bottom Line from the Class Action Sword.”
Read Article – https://www.asadigital.net/amstaffingassoc/september_october_2021/MobilePagedArticle.action?articleId=1741449#articleId1741449
#3. Reasonable Accommodations – Particularly around disabilities and religion. Although there are broad guidelines in place, reasonable accommodation requests must be assessed case-by-case. There is a lot of gray, and it’s an anxiety-driven topic for both the employer and the employee.
Here are three recommendations:
Thanks, Lia, for letting us share, and for more information, you can reach her at: lia@staffingGC.com | 317-514-9962 | www.staffingGC.com
Master Service Agreements are a critical component to risk mitigation. Most firms have their own MSA which they provide to their client for signature, but often a larger company that uses several agencies will require you to sign THEIR service agreement. Whether creating your own MSA or signing a client-supplied agreement there are 8 topics to consider – See below.
A good suggestion is to pull together defined contract paraments and develop a library of language to keep on file. That way you can be consistent, turn around contracts quickly, and within your acceptable risk tolerance.
If creating your own agreements, ASA has provided members access to view and download templates of staffing contracts. Available are models for general staffing, healthcare, and search.
Download Client Agreement Download Recruiting Agreement Download Healthcare Model
The ASA Staffing Law Conference is the only event dedicated exclusively to the legal and regulatory issues facing staffing, recruiting, and workforce solutions companies. The upcoming conference will feature leading subject matter experts on the industry’s most pressing topics.
Click the link to learn more and register to attend: https://americanstaffing.net/lawconference22/
Need support with HR Compliance? Looking for Employment Law Alerts? Have a question about a handbook policy? Have a termination question? As a TCI Business Capital client, you have complimentary access to our HR Compliance portal and HR On-Demand Service.Learn More