Staffing agencies responsibility for following FLSA

On Behalf of | Sep 9, 2021 | Fair Labor Standards Act (FLSA) |

Business owners in Pennsylvania have many responsibilities. They need to ensure that the business is running smoothly and profitable. This requires them to ensure that clients and customers are receiving the proper services. They need to ensure they are providing quality products and services, they need to market their products in order to gain new clients and customers and manage other aspects of ensuring success. They also need to manage their employees and ensure they are following all the employment laws and regulations.

One of these laws is the Fair Labor Standards Act (FLSA). This states many employees need to be paid at least minimum wage and paid overtime when they work more than 40 hours in a week. Employers obtain employees from various sources though. Some are through direct employment, but given the nature of some businesses, many companies also use staffing agencies to obtain their employees. They may do this because they need extra employees only during busy times of the year or because it is less time consuming for them to have a staffing agency find potential employees.

Staffing agencies work in various ways though. Some may be the employer of the employee even though the employee is working at a different company and not directly for the staffing agency. Others may just find the employee, but the company is the one who actually hires the worker. This distinction is important for both the staffing agency and the company when determining who is responsible for following FLSA.

Factors used to determine responsibility

In some situations both the staffing agency and the company will be responsible. There are factors to determine whether one or both are responsible. Those factors are:

  • Who has the authority to hire and fire the employee.
  • Who supervises or controls the employee’s schedule and job responsibilities.
  • Who determines the employee’s pay rates.
  • Who maintains the employment records of the employee.

When analyzing who is responsible for FLSA regulations, the staffing agency or company must meet one or more of the factors. Each case will analyze all the factors and one of the factors is not more important than the other in determining responsibility.

Many staffing agencies in Pennsylvania provide workers to various companies in need of employees. These staffing agencies are structured in different ways in terms of their control over the employees they find. It is important to understand who is controlling the employment and who is responsible for following FLSA and other employment laws. Determining responsibility is very fact-specific to the situation though and consulting with experienced attorneys could be beneficial.