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Practical Guidance on Contingent Workers and the ADA

Learn more about contingent workers under the ADA

From the desk of Tracie DeFreitas, M.S., Program Leader, Director of Training and Outreach

Many businesses employ contingent workers sourced through staffing agencies to support their operational needs. Contingent workers are typically employed on a short-term basis to fulfill a specific temporary labor need and can include temporary, contract, and leased workers. Employers can benefit from hiring contingent workers because labor commitments are limited, there can be fewer financial obligations, and this type of employment offers the opportunity to hire workers with a skill set that perhaps isn’t found within the traditional workforce. Individuals with disabilities can also benefit by having the opportunity to work in a variety of fields, gaining valuable experience, and having flexible work arrangements.

Contingent work arrangements can often entail an employment relationship that is complex when contracts do not adequately specify employer responsibilities. In particular, when it comes to applying federal laws like the Americans with Disabilities Act (ADA), staffing agencies and client employers sometimes misinterpret their individual and joint responsibilities to accommodate workers with disabilities and abide by the ADA. The Equal Employment Opportunity Commission (EEOC) has drafted enforcement guidance that addresses many of the ADA issues that arise related to contingent work arrangements. For information on this subject, see Application of the ADA to Contingent Workers Placed by Temporary Agencies and Other Staffing Firms.

JAN customers inquire about a variety of issues pertaining to the ADA and contingent workers. The following points address some of the common issues raised and include practical guidance for applying the ADA and engaging in the interactive process. Some issues that arise include understanding the application of the disability-related inquiry rules under the ADA, deciding when two parties are joint employers, and determining who is responsible for engaging in the interactive process and providing accommodations.

Applying Disability-Related Inquiry Rules

Covered employers of contingent workers, a staffing firm and the client employer, are both responsible for following the ADA rules related to disability-related inquiries and examinations. This means, during pre-employment, that neither entity may make disability-related inquiries or require medical examinations before making an offer of employment. A job offer occurs when a staffing firm worker is assigned with a particular client employer. Once an individual is assigned to work for a particular client, but before the job duties begin, the staffing firm or client employer may ask disability-related questions and/or require medical examinations, as long as the same inquiries and exams are required of all individuals entering the same job category. An offer of employment can be conditioned upon the results of disability-related inquiries and exams made during post-offer. After a contingent worker begins work, both the staffing firm and client employer are once again restricted in asking disability-related questions and requiring examinations. Disability-related inquiries and medical exams of employees must be "job-related and consistent with business necessity." For example, when a contingent worker requests accommodation to perform job duties and the disability or need for accommodation are not obvious, then either the staffing firm or client employer may ask disability-related questions of the contingent worker as part of engaging in the interactive process under the ADA.

Practical guidance: The ADA disability-related inquiry rules apply equally to the staffing firm and client employer in a contingent employment arrangement. It may be useful to declare, as part of the staffing firm/client contract, which entity will be responsible for obtaining and storing disability-related information. For example, the staffing firm might be designated as responsible for asking any disability-related questions, or requiring exams, during post-offer and when a contingent worker requests reasonable accommodation to perform job duties. For information about ADA disability-related inquiry rules and contingent workers, see questions 1 through 5 in Application of the ADA to Contingent Workers Placed by Temporary Agencies and Other Staffing Firms.

Deciding Which Entity is a Contingent Worker’s “Employer”

Sometimes covered entities dispute over who is classified as a contingent worker’s employer; the staffing agency or the client. This dispute may be unnecessary. In a contingent work arrangement, it is generally the case that the staffing firm and the client (assuming the client is a covered entity) are considered “joint employers.” According to the EEOC, the term "joint employer" refers to two or more employers that are unrelated or are not sufficiently related to qualify as an integrated enterprise, but each exercises sufficient control of an individual to qualify as their employer. For example, in a contingent work arrangement, the staffing firm might pay the worker’s wages, withhold taxes, and provide benefits, while the client employer might control when, where, and how the individual performs job duties. In this arrangement, both entities may share sufficient control of the contingent worker’s employment to be considered joint employers.

Practical guidance: Under ordinary circumstances, staffing agencies and client employers are generally considered joint employers of contingent workers. When this is true, both employers can be held liable for discrimination on the basis of disability and are responsible for engaging in the interactive process to provide reasonable accommodations. One way to avoid the debate over which entity is a contingent worker’s employer is to contractually assign responsibility for addressing issues that arise under the ADA. In the same way that a contract can clarify who will pay the employee and who will control the manner of the individual’s work, a contract may specify which entity will take the lead when handling ADA issues. Now, while this can be a practical way to proactively address the issue of employer responsibility, both parties can still be liable for violations of the ADA, even when a contract delegates contractual responsibilities.

Engaging in the Interactive Process to Provide Reasonable Accommodation

When an employee requests accommodation in a traditional employment situation, it’s clear that the next step is to engage in the interactive process under the ADA. Usually, an employer’s formal reasonable accommodation procedure will describe the process and delegate responsibility for acting upon accommodation requests. For example, an employee informs the first-line manager, the manager contacts Human Resources (HR), an HR professional follows-up with the employee, etc. In a contingent work arrangement, this can get a little complicated if a procedure or plan is not in place for effectively handling reasonable accommodation requests made by contingent workers. Should the contingent worker address the matter with the on-site manager or contact the staffing firm representative? Which entity will request disability-related documentation from the employee, if needed? Which entity will arrange for the accommodation? If there is a cost involved in providing the accommodation, which entity will pay?

Remember, where a staffing firm and its client employer are joint employers of a contingent worker with a disability, both entities are responsible for abiding by the ADA – this includes engaging in the interactive process with the employee. Also, both are obligated to provide reasonable accommodations, barring undue hardship. This is true because each entity qualifies as an employer of the contingent worker. This means that both entities, together and apart, can be responsible for providing accommodations. For example, a customer service representative makes it known to his manager that he needs a standing desk because he cannot sit for longer than one hour at a time. The on-site manager has a duty to respond to this request for accommodation, but which entity will purchase the equipment, if it is reasonable?

Practical guidance: Maybe by now you’ve recognized a trending suggestion with our practical guidance – What does the staffing firm/client employer contract say? Effective communication regarding responsibilities and expectations is important in any employment relationship. Don’t just take our word for it though; EEOC also suggests that contracts that specify which entity will provide reasonable accommodations and/or how accommodations will be funded may be mutually beneficial. Through a contract, staffing firms and client employers may allocate responsibility for providing reasonable accommodations in any way that suits both parties. This takes the confusion out of applying the interactive process, decreases the likelihood of unnecessary delays in providing accommodations, and enables both parties to anticipate potential costs of accommodations.

It is also suggested that staffing firms and client employers ensure that their respective management employees and HR professionals are properly trained on the employment provisions of the ADA, how to recognize and respond to requests for accommodation, and also on their own organization’s reasonable accommodation procedures and ADA-related contractual obligations. If a manager for a client employer receives a request for accommodation and does not act on this request to engage in an interactive process with the contingent worker, both the staffing firm and client employer can be held liable. By providing ADA training support to responsible employees, employers can limit their organization’s risk of potentially violating the ADA when employees are not adequately trained.

For information about engaging in the interactive process with contingent workers, providing accommodations, and also addressing issues of undue hardship in joint employer situations, see questions 6 through 10 in Application of the ADA to Contingent Workers Placed by Temporary Agencies and Other Staffing Firms.

Of course, many other issues can arise related to contingent work arrangements and the ADA. For more information, or to ask a question related to contingent workers and the ADA, please contact JAN to speak with a Consultant.

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