Don’t Trip Over Agency Interpretations
Does your business use temporary workers from a staffing agency? Many businesses that use temporary workers supplied by a staffing agency assume they do not have to worry about providing those temporary workers with time off pursuant to state or federal leave laws because they don’t consider them their employees.
They are hired and employed by the staffing agency that pays their wages, handles workers’ compensation and unemployment claims, provides benefits and—practically speaking—functions as the employer. But businesses need to be aware of the way “joint employment” can work and how the federal and state agencies interpret the law.
The federal Family Medical Leave Act (FMLA) applies only to those businesses that employ 50 or more employees. Small businesses who don’t have that many regular employees may assume the law doesn’t apply to them, but temporary workers may actually push their employee headcount over the top. The federal regulations expressly address situations where two or more businesses exercise some control over the work or working conditions of an employee. In some of these situations, the businesses may be joint employers.
The regulations specifically state that “joint employment will ordinarily be found to exist when a temporary placement agency supplies employees to a second employer.” Where joint employment exists, “employees jointly employed by two employers must be counted by both employers, whether or not maintained on one of the employer’s payroll, in determining employer coverage and employee eligibility.”
This means that an employer with fewer than 50 regular employees may actually be a FMLA covered employer if it also employs enough temporary workers to bring its total employee count (adding both regular employees and temporary workers supplied by a staffing agency) to 50 or more employees for each work day for 20 workweeks or more in the current or preceding calendar year. Additionally, case law interpreting the FMLA joint employer regulation has clarified that an employee’s eligibility for FMLA is determined from the date joint employment of the employee by the temporary agency and the onsite employer begins and does not reset upon hire as a regular employee by the onsite employer.
For example, an employee who is on the payroll of a temporary agency for four months and is then hired by the onsite employer as a regular employee would become eligible for FMLA leave once she works for the onsite employer for an additional eight months and has completed 1,250 hours of work in that 12 month period while assigned to or employed directly by the onsite employer.
What about state law? The Oregon Family Leave Act (OFLA) and its implementing regulations do not mention joint employment. But the Bureau of Labor and Industries (BOLI), which is the agency with enforcement responsibilities over OFLA, takes the position internally that OFLA follows FMLA with respect to joint employment issues, even if that is not included in the regulations issued by the state agency.
BOLI relies on OFLA’s “catch all” provision which states: “[OFLA] shall be construed to the extent possible in a manner that is consistent with any similar provisions of the federal Family Medical Leave Act of 1993.” Notably, OFLA defines “eligible employees” generally by stating that all employees of a covered employer are eligible to take leave for qualifying purposes if they have been employed by the covered employer for 180 days or more immediately before the date on which the family leave would commence and who worked an average of 25 hours per week or more for the covered employer during the 180 days immediately before the date on which the family leave would commence (except in the case of parental leave which does not have this average hours requirement).
In determining whether an employee has been employed for the preceding 180 calendar days, the regulations require the employer to count the number of days an employee is maintained on the payroll, including all time paid or unpaid.
While these definitions leave significant ambiguity, and most temporary employees supplied by staffing agencies are not on an onsite employer’s payroll, and while the published regulations are silent on the question of possible joint employment, BOLI takes the position that OFLA is interpreted in line with FMLA’s requirements.
So, when determining employee eligibility for OFLA leave, BOLI will actually count the time worked by an employee with a temporary agency when the employee is subsequently hired by the onsite employer, rather than strictly considering only the period the employee is on the onsite employer’s payroll. Additionally, as is the case with the headcount under federal rules, adding a few temporary workers could push a smaller Oregon employer’s employee count to 25 or more, meaning that an employer that thought it was not required to comply with state leave laws must, in fact, do so.
Because this isn’t in the statute or the published OFLA regulations, the interpretation could be challenged. But most employers would rather avoid a lawsuit. It is important to know that BOLI would be likely to find an OFLA violation for any employer failing to follow the joint employment rules published under federal law. To avoid being the test case and being dragged into an administrative or legal battle with BOLI, businesses that use temporary workers supplied by staffing agencies should double check their Family Medical Leave policies and practices to be sure that they don’t inadvertently fail to comply with this interpretation of OFLA’s joint employment requirements.
In other words, when reviewing employer coverage and duration of employment to determine OFLA eligibility, double check to see whether you are counting temporary employees and considering the time they were “assigned” to the business, even if they weren’t a regular employee. Those details might just be important.
Amy Angel, a partner at Barran Liebman LLP in Portland, handles employment litigation in state and federal courts and provides employer advice and solutions. Contact her at 503-276-2195 or at aangel@barran.com
