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Employment Practices Liability Issues for Temp Staffers

Employment Practices Liability Issues for Temp Staffers

Two of the greatest exposures to temp staffing companies, after workers compensation insurance claims, are errors & omissions concerns and employment practices liability (EPL) issues. Injuries, mistakes and other costly errors, and harassment or discrimination claims are a nightmare for any company and temp agencies have more than their fair share of concerns.

For example, a temp agency fills an order for a certified forklift driver and that driver ends up having an accident where the client company learns that the temporary worker is not certified after all. The errors & omissions insurance will respond to the claim due to the agencies error in placing the employees and not verifying the certification.

On the other hand, employment practices liability protects employers against claims by employees alleging discrimination, among other claims. For instance the policy would respond to a claim based on sexual harassment, race or age discrimination, or a disability claim by the employee. Temp staffing agencies have a greater exposure due to not having control & custody of their employees and a properly constructed policy would also offer 3rd party coverage for placed employees.

In many cases, employees or candidates that have not actually been harmed in anyway, simply decide to file a questionable or fraudulent claim for any number of reasons:

  • They were not hired after failing the interview process
  • They were overlooked for a position they felt they were qualified for
  • They believe a slanderous statement was made against them by their employer or another worker
  • They feel that they were exposed to inappropriate language or suggestive photos
  • They feel that they were discriminated against or harassed in any way

Unfortunately, lawsuits might arise in the course of employing staff, for any of the reasons listed above, as well as for false imprisonment, breach of contract, emotional distress, and wage and hour law violations. Defending claims can be a difficult process, not to mention costly and time-consuming. Setting guidelines, and informing everyone via an employee handbook, as well as orientation meetings, can help to accomplish avoiding employment practices liability issues, so that proper conduct is observed by all workers.