In light industrial manufacturing and distribution, co employment risks in temporary staffing are often underestimated. Many employers assume the staffing agency carries full legal responsibility. That assumption is not only incorrect—it can be costly.
What Is Co Employment?
Co employment means both your company and the staffing agency share certain responsibilities for a temporary worker. That includes wage compliance, workplace safety, and labor law adherence. While your staffing partner handles recruiting and payroll, your company is still legally responsible for what happens on the floor.
The Most Common Misconception
A lot of manufacturers believe the staffing agency alone is accountable for everything from OSHA compliance to injury claims. This misunderstanding can create exposure to lawsuits, fines, and reputational risk. If a temporary employee gets injured in your facility, and you haven’t followed the right protocols, your company can be held liable—regardless of what your staffing contract says.
Areas Where Responsibility Is Shared
1. Safety Training and Equipment
You are responsible for site-specific safety training and personal protective equipment. The staffing agency typically provides general safety guidance but cannot ensure on-site safety practices.
2. Labor Law Compliance
Wage and hour laws, break schedules, and working conditions fall on both parties. Misclassification or violations—even unintentional—can trigger Department of Labor audits.
3. Harassment and Discrimination
Your managers oversee the daily work. That makes your company liable for hostile work environment claims, even for temporary workers.
4. Recordkeeping and Incident Reporting
If you direct the worker’s daily tasks, OSHA considers you the primary employer for injury reporting. You must track and document any incidents that occur on-site.
State Laws Can Raise the Stakes
Co employment laws are not consistent across all states. Illinois, for example, has implemented legislation that places clear responsibilities on both staffing agencies and their client companies. Failing to follow these can result in serious penalties—even if your staffing provider appears compliant.
Here are a few key regulations in Illinois:
- Illinois Day and Temporary Labor Services Act (820 ILCS 175): This law requires staffing agencies to register with the state and mandates that both the agency and the client company are jointly responsible for paying wages, ensuring safety, and maintaining accurate records.
- Joint Liability for Wage Payments (Section 42): If a staffing agency fails to pay a worker properly, the client company can be held equally liable for unpaid wages, even if the issue originated with the agency.
- Right to Know Posting Requirements: Employers must post notices detailing temporary worker rights, job details, and pay rates. Not complying can lead to fines and legal action.
For a full overview, see:
Protecting Your Business Starts with Clarity
To reduce co employment risk:
- Put everything in writing. Contracts should clearly define each party’s roles and obligations.
- Audit your worksite for safety and compliance regularly.
- Maintain open communication with your staffing partner about training, supervision, and reporting.
- Know your state’s labor laws and stay ahead of changes.
Final Word
Temporary staffing should lighten your load—not add legal risk. At Xcel Staffing Solutions, we don’t just fill roles. We partner with you to reduce risk, ensure compliance, and keep your operations running smoothly. If you’re looking for a staffing agency that understands the realities of co employment, we’re here to help.
Let’s talk. Reach out to us to start a conversation about safe, compliant staffing solutions.