August 23, 2019

We’ve just partnered with a staffing agency in Chicago. They have assured us they have done background screens and that each IC has workers’ comp and liability insurance. The staffing agency has a third party to pay ICs and prepare 1099s. We want to use this to cover peak production periods but now we are worried because we have employees, temporary labor staffing, and ICs all working similar positions. Sales staff at the staffing agency was convincing, but now we are not certain we’re on solid ground for classification. What should we do?

This is a rather complex legal question because it involves multiple parties. However, it is important to note that if the worker is rendering services to an employer—then all hiring/contracting duties, responsibilities and classification decisions are generally the responsibility of that employer. An outsourced staffing provider’s actions and interactions may have a bearing on classification findings related to that employer. It is likely best to consult with an employment lawyer familiar with applicable state and federal classification laws to make a quick review of the processes utilized both internally and by the staffing agency.