Yours, Mine, or Ours? Avoiding Joint Employer and Contractor Misclassification

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Companies are increasingly using subcontractors, temporary staffing agencies, leased employees, and independent contractors to supplement or, sometimes, replace their regular workforces. While use of an alternative workforce can provide companies with “just-in-time” staffing and reduce benefits and payroll costs, use of a contingent workforce is fraught with potential traps and liability for the unwary. Companies which develop “best practices” for beginning such relationships will have a better chance of avoiding joint employer and misclassification issues down the road.

The most important practice for companies to follow when retaining contingent workers is to “get it in writing” in the form of a well-drafted agreement. The following is a list of the key contract provisions to consider including in agreements with temporary staffing agencies and contractors.

The agreements should include, among other things, the following:

  • representations and warranties regarding compliance with all employment laws;
  • representations and warranties regarding compliance with all state and federal wage and hour laws;
  • representation that the staffing agency or contractor has an anti-harassment policy and the appropriate complaint procedure;
  • an agreement that the staffing agency or contractor is responsible for all required training, including safety training;
  • an agreement that the staffing agency or contractor is solely responsible for on-site supervision of contingent workers;
  • an agreement that the staffing agency or contractor is solely responsible for all recruiting, hiring, pre-employment screening and testing, I-9 verification and recordkeeping, providing personnel policies, and maintaining personnel records and files;
  • an agreement that the staffing agency or contractor is solely responsible for all payroll, tax withholding and recordkeeping functions, employee benefits (i.e., health insurance), appropriate insurance coverage (i.e., workers’ compensation), and administrating its own I-9, pre-employment testing, and background check programs;.
  • an agreement that the staffing agency or contractor is solely responsible for performance management, discipline, and termination;
  • an agreement regarding the term of the agreement (which should be limited or fixed duration);
  • a statement regarding indemnification obligations; and
  • a termination provision.

Even with such an agreement, you are not out of the woods yet. It is imperative that the company maintain separation between the regular employees and the contingent workers. Here are some things to consider:

  • Train managers and supervisors regarding how they should interact with the staffing agency or contractor and with the contingent workers.
  • Do not include contingent employees in the same training sessions with regular employees (i.e., computer systems training, etc.) and exclude them from “all employee” meetings and social functions.
  • Require contingent workers to have different identification cards and security badges (i.e., indicating that they are temporary workers), and different uniforms.
  • Require contingent workers to sign a document prepared specifically for them, which includes certain special confidentiality and non-disclosure obligations.
  • Do not include contingent workers in memoranda/announcements addressed to “all employees.” Have separate notifications and announcements for contingent workers.  Similarly, these workers should not be included within the definition of “all employees” in the company’s e-mail distribution lists.
  • Require contingent workers to sign acknowledgments confirming that they are indeed contingent workers who are employed by the staffing agency or contractor, and not by the company. 

Finally, while there are myriad tests for determining joint employer and independent contractor status, courts will generally look at the  totality of circumstances to determine whether the company exercised such a significant level of control over the manner in which the contingent employees performed their work to warrant imposing liability on the company under a joint employer theory or contractor misclassification theory. 

At the end of the day, it’s not just the words you put in your agreements that matter—it’s how the terms of the agreements are implemented on a day-to-day basis by the individuals who interact with the contingent workers—that can make the difference between liability and no liability. 

Written by:

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.