{"id":33463,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/outsourcing-your-human-resources.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"outsourcing-your-human-resources","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/human-resources\/outsourcing-your-human-resources.html","title":{"rendered":"Outsourcing Your Human Resources"},"content":{"rendered":"
\n
\n

This article was edited and reviewed by FindLaw Attorney Writers<\/a><\/em><\/p>\n\n | Last reviewed\n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n\n

Of the many recent changes in the workplace, perhaps none is so dramatic as the trend towards outsourcing of the human resource function. While temporary and contract employees have been used for many years, there has been an explosion in this area within the past decade. A quick review of the local phone book identifies dozens of employment agencies. This article will explore some of the legal issues that may be raised as a result using alternative employment methods. Use of Temporary Employees<\/b>

Many employers supplement their existing employment ranks by the use of temporary employees. One purpose for this strategy is to avoid the layoff and recall of regular employees, which may provide some sense of job security to employees. An employer also can avoid higher benefit costs since the temporary or contract employees are not placed on the employer.s regular benefit program.<\/p>

For employment law purposes, is the temporary worker an employee of the temporary agency or of the business using the service? For unemployment compensation and worker compensation purposes, the law generally views the temporary employee as employed by the temporary agency. For OSHA compliance purposes, the law generally treats the temporary employee as employed by the business utilizing the service. For discrimination law purposes, the temporary agency and its customer may be viewed as joint or co-employers, meaning that each may be liable for the others. discriminatory acts.<\/p>

Long-term use of the same temporary employees may raise legal issues. Under the Employee Retirement and Income Security Act, the retirement and health plans of the business using the temporary employees may be affected. If the employees seek to form a union, the temporary employees may be allowed to vote if they have a sufficient community of interest with the regular employees.<\/p>

Use of Third Party Employers<\/b><\/p>

A more recent trend involves removing all employees form the payroll and placing them on the payroll of an administrative Company which provides all or most human resource functions (e.g., hiring, firing, benefit administration, discipline, documentation ,etc.). This is sometimes referred to as employee leasing. This may be particularly attractive to professional service companies, for example medical and law professionals, who seek to minimize their involvement in human resource functions.<\/p>

Another area where this practice is gaining popularity is so-called back room functions. In these situations, the employer terminates all of its employees, who are then hired by a company which specializes in back room operations. Typical back room functions include mail receipt and processing, billing and collections, and even customer service functions. From a legal standpoint, the degree of supervision exercised by the respective parties will significantly impact on the determination of legal liability. If the putative employer has supervision on site (e.g., an on-site supervisor), the business owner using the service is less likely to be viewed as an employer. Alternatively, the mere placing of an individual on another company.s payroll may be viewed as little more than a payroll processing service.<\/p>

Placing individuals on another company.s payroll does pose some legal risks. If your own employee slips and falls in the parking lot, the limits on liability imposed by the workers. disability compensation act will likely come into play. But what if the injured individual is a back room employee of another company? In this case, the individual may be able to assert both a workers. compensation claim against his employer and a tort claim against the property owner.<\/p>

Conclusion<\/b><\/p>

Use of these non-traditional employment services may make good sense for some businesses. However, before doing so, the business should consider the legal risks of doing so. Any relationship with a third party provider of employment services should be carefully documented in a written agreement.<\/p><\/div>","protected":false},"excerpt":{"rendered":"

Of the many recent changes in the workplace, perhaps none is so dramatic as the trend towards outsourcing of the human resource function. While temporary and contract employees have been used for many years, there has been an explosion in this area …<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6487,6486],"class_list":["post-33463","corporate","type-corporate","status-publish","hentry","corporate_categories-human-resources__employment-laws","corporate_categories-human-resources"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/33463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=33463"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=33463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}