• Wed. Oct 5th, 2022

Managing Labor Shortages in the Food Industry and the Effects of Using Contingent Workers

ByStephanie M. Akbar

Sep 13, 2022

In short

The situation: Faced with a tight labor market, American employers in the food industry are increasingly turning to temporary workers to meet their staffing needs.

The result: Temporary work presents additional legal and labor relations challenges for employers in the food industry, including unintended joint employer liability and increased risk of unionization among non-temporary employee populations.

Look forward: Food industry employers who use temporary labor should be aware of the legal and labor relations risks that temporary labor presents and take meaningful steps to mitigate those risks.

From agriculture and food processing to food service, the global food industry has been rocked by labor shortages. The American food industry has more and more answered relying on temporary labor to fill labor shortages. Temporary labor is expensive, with high markups on workers’ hourly rates, high turnover, and reduced productivity. Temporary work also poses significant legal and labor relations risks that food industry employers should take steps to mitigate.

Chief among these risks is the joint liability of employers. Under the joint employer doctrine, the recruitment agency and the user of temporary labor can be held jointly and severally liable for labor law violations involving temporary employees, including under anti-discrimination, hourly wages, payment of wages, employee representation, employee privacy and other employment laws.

Although the definition of “co-employer” varies depending on applicable law, generally an employment agency and a temporary labor user can be considered joint employers if the temporary labor user temporary labor has sufficient control over the terms and conditions of employment of temporary employees. . If it turns out to be a joint employer, a temporary labor user may find themselves saddled with unexpected legal costs, fines, penalties and other liabilities arising from the conduct of his recruiting agency over which he has exercised no oversight or control, such as liabilities arising from employment eligibility checks and other pre-employment screening practices. Gaps in monitoring and training in temporary worker populations can also create risks of compliance with pay hours under meal, break and rest period laws, predictive scheduling laws and other federal, state and local laws.

Beyond the risks of joint employer liability, temporary workers often experience higher injury rates due to temporary workers’ inexperience, lack of training, and mistakes, which create occupational health and safety compliance risks. An increased risk of injury, coupled with high turnover (among other factors), can fuel dissatisfaction among temporary and full-time employees, which, in turn, can increase support for unionization.

A proactive approach to temporary workforce management is required to effectively mitigate these risks. Food industry employers should consider the following:

  • Carefully review agreements with placement agencies. Employers who use temporary labor should regularly review the agreements with their recruitment agencies, both from a legal and human resources point of view. At a minimum, these agreements should: (i) define the parties’ oversight responsibilities with respect to the temporary employee population; (ii) include indemnification structures that allocate liability for violations of law in accordance with the enterprise’s risk tolerance and understanding of the parties; (iii) contain market representations regarding the placement agency’s compliance with labor and employment laws; and (iv) using fee structures and acting arrangements that meet the employer’s recruiting and staffing needs.
  • Consider pre-employment checks. Employers should consider requiring their staffing agencies to perform background checks, drug testing and employment verification (including E-Verify) for all temporary workers provided by the agency. ‘recruitment agency. If an employer chooses to use these pre-employment screening services, their recruitment agreements should: (i) document the obligations of the recruiting firm and (ii) assign liability for potential violations of law .
  • Regularly review the policies applicable to temporary employees. At least once a year, employers should review policies applicable to temporary workers, including safety and health policies, to ensure they comply with applicable labor and employment laws. Many employers also conduct privileged safety compliance audits to mitigate occupational health and safety risks and/or audits of wage payment practices to assess and, if necessary, improve compliance with the laws of the applicable work.
  • Use reputable recruitment agencies. Reputable recruitment agencies will carry workers’ compensation, general liability and employment practices insurance with minimum limits sufficient to cover employment-related liabilities. Insurance requirements, including minimum levels of coverage, should be documented in the parties’ staffing agreement. It is also good practice for employers to periodically conduct targeted litigation searches to determine whether their recruitment agencies have been named and/or found liable in any employment litigation, including searches for accusations from the National Labor Relations Board, citations from the Occupational Health and Safety Administration and allegations of discrimination.
  • Regularly assess recruitment and retention competitiveness. Temporary worker populations can have a marked impact on full-time employee populations. Employers should consider conducting salary benchmarking, employee satisfaction surveys, exit interviews and unionization risk assessments among their full-time employee population to assess recruitment competitiveness and retention. Proactive employee engagement on workplace issues should be a priority. To this end, front-line supervisors and business leaders should receive regular labor management relations training to ensure they know how to effectively engage employees to ensure compliance with applicable labor laws. work and employment.

Three takeaways

  1. In response to a tight labor market, employers in the food industry are increasingly turning to temporary workers to fill gaps in their workforce.
  2. The use of temporary labor comes with legal and business risks; it is not only costly, but also presents potential joint employer liability and labor relations challenges.
  3. Now is the time for food industry employers who use temporary labor to proactively review their relationships with recruitment agencies and manage their temporary workforce.

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