The compliance questions you should be asking (but aren't)

Working with a staffing agency can raise a lot of questions, some critical for an employer to ask and some that can cause more problems down the line.

When it comes to compliance in staffing, the wrong answers to these questions have the potential for serious financial and reputational harm. Even common compliance missteps can quickly expose employers to fines and liabilities.

See the six key questions today’s employers need to navigate.

What to ask?

Do you classify your workers as W-2 employees or independent contractors? How do you decide?

It’s a critical question to ask when evaluating staffing providers. Many agencies attempt to classify workers as independent contractors, even when their role doesn’t meet the legal criteria. There are incentives for agencies to misclassify workers, but it carries significant risks – even for their client.

However, that’s not their decision to make. The criteria to classify someone as an independent contractor is governed by federal – and in some cases state law.

Are you an E-Verify employer? What’s your I-9 process?

While not every state requires employers to use E-Verify, I-9 verification is still a critical ask. Some industries – and certain staffing agencies – must utilize it under law. Not using E-Verify can introduce risks, especially in fields with strict compliance requirements.

Employers need to know what their staffing provider’s processes are, because it can tell a lot about their approach to compliance, how their staff are trained, and how they would handle an audit. If there is no answer as to which person or team is clearly responsible for compliance, that’s a red flag.

How do you stay compliant in multi-state onboarding?

When you outsource your onboarding to a staffing agency, you're trusting them with more than simply preparing workers for your site. If your vendor mishandles onboarding, your organization could face legal consequences (in addition to high turnover).

States with temporary worker bills of rights often impose strict requirements for new hires. That means you and your provider could be responsible for minimum wage enforcement, pay transparency, and regulations like the Fair Credit Reporting Act (FCRA).

What not to ask?

Can you send me copies of all your Form I-9s and E-Verify case results, so I can be sure you are employing authorized workers?

Many employers want to check up on their staffing agency and review their worker’s I-9 forms – but doing so can actually create legal risks for both of you. While it’s critical to understand how your provider handles the verification process, federal law limits what employers can share with third parties. Because the staffing agency serves as the employer of record, that means clients are not entitled to those forms.

Requesting these forms could expose both you and your agency to legal action. In addition, I-9 forms also contain private information that, if mishandled or stored improperly, could lead to a security breach or accusations of discrimination.

Can you put a cap on the length of assignment?

Some employers ask agencies to set limits on how long a temporary worker can stay, requiring that their assignment end after a certain length of time or they take a significant break before being redeployed again. Often, this stems from concerns about potential liability or inadvertently violating employment laws.

However, many of the employers who do this fail to understand how joint employment regulations have evolved. Today’s web of federal and state rules can be difficult to navigate, so instead of limiting worker assignments, employers should consult legal counsel to ensure they have strong governance reviews in place.

Can you run a pre-employment drug test – and include marijuana for all candidates?

The answer is yes, of course. However, it might be time to rethink it. New marijuana regulations are sprouting up all over the country, making it one of the most rapidly evolving areas of employment law.

Even if you reviewed your policies within the past couple years, now is the time to take a close look to make sure you’re following the newest regulations on medical marijuana, recreational use, pre-employment testing, and disability protections. Employers should also be aware that these regulations can change based on the temporary role or their choice in staffing agency, especially ones that handle federal contracts.

Need a deeper dive?

Even if the fines fall on your staffing provider, as the employer of record – there are other risks with noncompliance. The consequences of losing part of your workforce can be severe, ranging from site shutdowns and lost contracts to lasting damage to your reputation.

Adecco’s Donna Scholz, Vice President, Human Resources Compliance, encourages employers to take a thoughtful look at their current staffing partnerships:

“Are we asking them the right questions? Are we avoiding the ones that could pull us into hot water? And are we working with partners who help us to stay compliant and competitive?”

If the answer is no, that may be your cue to start the conversation with your staffing agency – or consider finding one that can confidently manage compliance. Contact us today to get started.

The purpose of this webinar and article is not to give legal advice. Companies should consult with competent immigration and employment counsel on how to navigate these complex topics in their workforce.