American Staffing Association (03/09/12) Ed Lenz

Staffing firm clients increasingly demand to be indemnified against a broad range of potential liabilities, and there is intense competitive pressure for staffing firms to agree to these demands. But doing so could result in a nasty surprise and significant liability.

A 2002 appellate court decision involving a temporary employee on a construction assignment, who caused an explosion while moving propane tanks, illustrates this danger. In defending against the lawsuit brought by the client, the staffing firm argued it was not liable because the temporary employee was under the client’s control at the time of the accident. The district court agreed, but the appeals court reversed the decision.

Staffing firms should not be expected to cover risks beyond those inherent in the staffing business. Staffing firms should not assume risks related to the client’s business, including liability for the client’s products and services. To help ASA members and their attorneys deal with these and other issues, ASA has developed suggested contract language that spells out the staffing firm’s and the client’s responsibilities.

Los Angeles Times (03/09/12)

A three-judge panel of the U.S. 11th Circuit Court of Appeals has blocked two sections of Alabama’s new immigration law. These sections would prevent courts from enforcing contracts involving illegal immigrants and would make it a felony for illegal immigrants to do business in the state. The panel said it would wait until the U.S. Supreme Court issued a ruling on the legality of Arizona’s immigration law before making a decision on the rest of Alabama’s law; oral arguments in the Arizona case will be heard by the Supreme Court April 25. Other sections of Alabama’s law were blocked by the Appeals Court panel in October.

Lexology (02/27/12)

The fiscal year 2013 budget recently proposed by President Obama earmarks $14 million in funding for the U.S. Department of Labor to “detect and deter” companies from misclassifying employees as independent contractors, with $10 million to be given as grants to states to uncover instances of misclassification and recoup unpaid taxes and $4 million for the DOL to launch investigations into misclassification. The DOL’s 2013 budget devotes funding to hiring another 35 full-time investigators to handle misclassification, with the agency noting that it will maintain an “increased presence in those industries where the misclassification of employees as independent contractors is prevalent.” Therefore, companies would be wise to ensure right now that they are in compliance with rules governing independent contractors.

Philadelphia Inquirer (03/08/12) Joelle Farrell

New Jersey lawmakers are considering legislation that would hike the minimum wage by $1.25 to $8.50 per hour, with the Senate Labor Committee approving the measure on March 8. Proponents of the bill insist it will bolster the economy by giving working families money to purchase things they need, but critics worry that hitting businesses with a payroll increase right now will prompt them to lay off workers or move business to nearby states with lower minimum wages.