1. Anna Elento-Sneed June 13, 2018
Webinar Wednesdays
HR TOOLKIT -- STAFFING
Anna Elento-Sneed
June 13, 2018

2. Please consult an attorney if you have specific legal issues.
Disclaimer
This presentation is provided for informational purposes only and is not intended and should not be construed to constitute legal advice.
Please consult an attorney if you have specific legal issues.
Copyright 2018 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

3. Staffing Options in a “Gig” Economy Factors to Consider:
DISCUSSION TOPICS
Staffing Options in a “Gig” Economy
Factors to Consider:
Control v. Cost
Proprietary rights
Confidential information
Insurance coverage for workers’ actions
Liability for workers’ conduct
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

4. STAFFING IN A “GIG” ECONOMY
“Traditional” Options
Employee
Full time
Part time
Temporary contract workers
Independent contractor
Company
Individual (“Consultant”)
“Newer” Options
Temporary staffing agencies
Leasing companies
PEOs
Franchisees
Web-based providers
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

5. BASICS: EMPLOYEE Definition Advantages Disadvantages
Individual performing service for another
Formal relationship not required
Advantages
Employer controls employee
May dictate duties, performance standards, terms & conditions of employment
Disadvantages
Compliance with federal & state laws
Increasing labor costs & limited methods for reducing costs
Labor & employment laws do not adapt quickly
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

6. BASICS: INDEPENDENT CONTRACTOR
Definition
Individual meets criteria set forth in different labor & employment laws
Advantages
Frees company from employer obligations to IC
IC responsible for meeting employment requirements of its employees
Disadvantages
Loss of control
Failure to classify individual properly can result in significant damages, penalties & fines
IC designation doesn’t shield your company from liability if your “agent” is injured or injures another
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

7. BASICS: TEMP/LEASED/PEO EMPLOYEE
Definition
Employees from one company (Company A) assigned to work for another company (Company B)
Advantages
May use employees to fill staffing needs (temporary, long term basis)
Not directly employed by your company; temp/leasing agency/PEO is responsible employer
Disadvantages
Same disadvantages as independent contractors
Joint employer liability – compensation, unions, etc.
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

8. Independent Contractor Temp/Leased /PEO Employees
BASIC COMPARISON
Employee
Independent Contractor
Temp/Leased /PEO Employees
Definition
Individual performing service for another
Individual meets criteria set forth in different labor & employment laws
None. Generally describes employees from one assigned to work for another company
Advantages
Employer controls employee
Frees company from employer obligations to IC and IC’s employees
May use temps to fill temporary vacancy
Temp or leasing agency is responsible employer
Disadvantages
Compliance with federal & state laws
Costs
Loss of control
Significant costs if misclassified
Still liable for injuries
Same disadvantages as ICs
Joint employer liability
Copyright 2018 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

9. COSTS v. CONTROL Costs of Staff Control Wages Benefits Taxes
Company revenue & expenses
Control
Method
Means
Timing
Quality
Quantity
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

10. COMPARE: COST v. CONTROL
Employee
Independent Contractor
Temp/Leased/PEO Employee
Costs
Wages
Benefits
FICA/FUTA/ SUTA
Co. revenue & expenses
Negotiated fee
No benefits
No FICA/FUTA/ SUTA
IC’s expenses & profit
Co’s expenses & profit
Control
Method
Means
Timing
Quality
Quantity
Timing, limited
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

11. PROPRIETARY RIGHTS
Right to ownership of a product or work depends upon the relationship between the company & the person helping on the project
Three types of relationships:
Employee
Independent contractor (includes temp/leased/PEO) with “work for hire” agreement
Independent contractor (includes temp/leased/PEO) without “work for hire” agreement
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

12. PROPRIETARY RIGHTS Employee
If work is created in course & scope of employment, ownership belongs to employer
Issue is whether individual meets test for employee status
Courts look at variety of factors including:
Control exercised by hiring party
Skill required
Compensation, benefits & tax treatment
Right to assign work over time
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

13. PROPRIETARY RIGHTS Independent Contractor w/ Work for Hire Agreement
Work commissioned from skilled, independent contractor & performed pursuant to written agreement
Work must fall within nine categories of “work for hire” agreements
Commissioned work owned by hiring party
Contribution to collective work
Instructional text
Part of motion picture or audiovisual work
Test
Translation
Answer material for test
Supplementary work
Atlas
Compilation
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

14. PROPRIETARY RIGHTS
Independent Contractor w/o “Work for Hire” Agreement
If work falls out of “work for hire” categories, or hiring party fails to enter into written agreement designating product as “work for hire,” then ownership of commissioned work belongs to independent contractor
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

15. CONFIDENTIALITY Trade Secrets Refers to any information that is:
Not publicly known
Gives a competitive edge to owner
Maintained as a secret
Governed by state law
Company at risk of losing trade secrets if employees lured away by competitor
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

16. CONFIDENTIALITY Steps to Protect Trade Secrets
Develop internal trade secret policy & procedure
Identify confidential information
Restrict access
Warn employees about unauthorized disclosure
Consider using contracts to protect info.
Confidentiality agreements
Non-disclosure agreements
Non-compete agreements
Per HRS Sec , non-compete and non-solicitation agreements not permitted for software & technology development companies
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

17. COMPARE: PROPRIETARY RIGHTS & CONFIDENTIALITY
Employee
IC Agreement w/ Work for Hire Agreement
IC w/o Work for Hire Agreement
Proprietary Rights
If work done in course & scope of employment, work belongs to Employer
Co owns if: (1) work commissioned; (2) per written contract; (3) work falls w/n 9 categories
IC owns work if no valid, written work for hire agreement entered into
Confidentiality
Can use policy & procedure to protect info
Contract provides better protection
Written contract w/ confidentiality provisions required
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

18. INSURANCE COVERAGE FOR WORKER
Worker seeking coverage under policy
Type of Insurance
Employee
Independent Contractor
Temp/Leased/PEO Employee
Workers Comp
Covers employee’s work-related injuries/illnesses
Covered as claimant
Not covered
Would need coverage from Temp/Leasing/PEO
TDI
Covers employee’s non-work related injuries/illnesses
Employment Practices Liability
Covers claims against Co. & management filed by employees
Covered as defendant if action was in course & scope of worker’s employment as supervisor or manager
Would need coverage from Temp/Leasing/PEO; only covers acts in course & scope of employment for Temp/Leasing/PEO
Directors & Officers
Covers claims filed against Dir. & Officers
Covered as defendant if action was good faith execution of worker’s duties as Dir. Or Officer
May be covered as defendant if action was good faith execution of duties as Dir. Or Officer
Generally not covered
Commercial General Liability
Covers claims against Co.
Covered as defendant if action was in course & scope of worker’s employment
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

19. LIABILITY FOR WORKER’S CONDUCT
Claims filed by others
Situation
Employee
Independent Contractor
Temp/Leased/PEO Employee
Worker damages Co. property
If done in course of employment, Co. liable
Acting as Co. agent, Co. liable
If not an agent, Co. not liable
Acting as Co. agent, or joint employee, Co. liable
If not at agent or joint employee, Co. not liable
Worker injures co-worker
Worker damages property of 3rd party
Worker injures 3rd party
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

20. INSURANCE IF WORKER FILES CLAIM
From Your Company’s Perspective…
What Worker sues for
If it applies, what insurance?
Applies to Employees?
Applies to ICs?
Applies to Temp/Leased/PEO Worker
Labor and employment law violations
Applies?
Yes No
Possible (Joint Employer)
Insurance
EPLI, D&O
n/a
Injury to Worker
Possible (Joint Employer
EPLI, Worker’s Comp
CGL
Workers’ Comp or CGL
* Note that insurance usually doesn’t cover contract related claims.
Copyright 2018 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

21. TIPS FOR SORTING THROUGH ISSUES
Assess your resources, needs and tolerance
What can the company do (not do)?
Budget and time
Needs for control over the end product
Liability tolerance
Consider your options, carefully
Know who you are working with
Don’t be afraid to ask questions
Copyright 2016 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019

22. Questions?
Copyright 2018 ES&A, Inc. All Rights Reserved Confidential and Proprietary
June 2, 2019