Connecticut Employment Law Blog Insight on Labor & Employment Developments for Connecticut Businesses

Court: Temps May Not be “Employees” Under Workers Compensation Law, Allowing Lawsuit

Posted in Highlight, Human Resources (HR) Compliance

As I continue to work on a major redesign and relaunch that I hope (!) to roll out by month’s end which has held up some blog posts, my colleague Gary Starr returns this morning with a new post regarding a recent Connecticut court decision and temps. 

starrEmployers who use a staffing company to supplement their employees may find themselves in for a rude awakening if the temp gets hurt at their worksite.

Ordinarily, an employee injured on the job would be covered by the workers compensation insurance.

A recent Superior Court decision rejected the idea that the temp is covered by the employer’s workers compensation insurance and is allowing a lawsuit to go forward against the employer.

The court found that the temp was an employee of the staffing company and not the employer, even though the temp accepted the assignment with the employer, the work was being done for the employer, and the temp was under the control of the employer at the worksite, and not the staffing company.

While there are several state court decisions that have found this arrangement to be a dual employment situation, other courts have rejected the concept of dual employment.  Under dual employment, the temp would have been covered under the employer’s workers compensation insurance.

Until an appellate court or the Connecticut Supreme Court rules on this issue or the legislature clarifies the statutory scheme, employers using staffing companies to fill out their employment needs, run the risk that if the temp gets hurt, they could be sued.

Such a lawsuit would present a risk of liability that could exceed the workers compensation formulas, with possible punitive damages.

Employers should be careful in their negotiations with staffing companies to try to establish a dual employment relationship with the temp, even having the temp sign a written agreement with the employer accepting the assignment with the employer.  There should also be clarification of the scope of any indemnity.  The employer should check with its workers compensation insurance carrier to ensure coverage of any temps.

While these steps may not avoid the consequences described above, it may provide a basis for arguing for dual employment and for coverage under workers compensation.

Of course, dual employment has its own set of challenges as well so employers using temps need to understand both the pros and cons in such a relationship.