The Staffing Agreement, Joint Employer Audit, and Temp Worker Claim Toolkit

Labor and Employment > Staffing Agencies, Day Labor, and Joint Employment | Published 24 March 2025 - Updated 28 June 2025 | UpLaw - uplaw.us

How to use these tools

⚠️ Joint employment is decided statute by statute. Tool 2 runs the analysis the way it is actually done — one statute at a time — and a memo that says "the client is a joint employer" without naming the statute is not an answer.

⚠️ Tool 1's five provisions decide most staffing cases: the client payroll audit right, the timekeeping source, the safety allocation with orientation before first shift, the express special-employer designation, and the agency site-visit right. Everything else in an agreement is commercial.

⚠️ Tool 7 is time-critical. In an injury case, exclusivity will foreclose the obvious defendant, and the third-party claim must be identified in the first week because nobody else will look for it.

Tools 1 through 3 are setup and audit. Tools 4 through 6 are wages and safety. Tools 7 through 9 are injury, adverse actions, and claims. Tools 10 through 12 are day labor, no-poach, and authority.

Nothing here is legal advice. Client liability statutes, borrowed servant doctrine, and covenant enforceability all vary by State.

Tool 1 — Staffing agreement term sheet

STAFFING SERVICES AGREEMENT — KEY TERMS Client ______ Agency ______ Effective ______ Sites covered ______

1. Employer designation. "Agency is the employer of record for payroll, tax withholding, and benefits. The parties acknowledge that this designation does not determine employer status under any statute, and that either party may be found a joint employer." ⚠️ Say this. A contract asserting "sole employer" is not an argument and reads badly.

2. ⚠️ CLIENT PAYROLL AUDIT RIGHT. "Client may, on ___ days' notice and not more than ___ times per year, examine Agency's payroll records for workers placed with Client, including time records, pay registers, deduction records, and proof of payment." Exercised on ______ by ______ Findings ______

3. ⚠️ TIMEKEEPING. Source of record: ☐ Client's system ☐ Agency's system ☐ Both, reconciled by ______ "Where Client controls the time recording system, Agency shall pay from Client's data. Client shall provide raw time data, not summaries." Client-site time expressly compensable: ☐ badge-in to station ☐ security screening ☐ waiting for equipment ☐ pre-shift meetings ☐ donning and doffing ☐ post-shift cleanup

4. Overtime aggregation. "Agency shall aggregate hours across all assignments worked by a placed worker in a workweek and pay overtime on combined hours."

5. Bonus notification. "Client shall notify Agency of any payment made directly to a placed worker within ___ days so that it may be included in the regular rate."

6. ⚠️ SAFETY ALLOCATION. (See Tool 6) Agency: general safety training ☐ hazard inquiry before placement ☐ site-visit right ☐ Client: site orientation before first shift, documented ☐ site-specific hazard training ☐ protective equipment ☐ day-to-day supervision ☐ Stop-work right: "A placed worker may refuse work reasonably believed unsafe without loss of assignment or pay."

7. ⚠️ WORKERS' COMPENSATION. Policy carried by ______ Certificate delivered ☐ Renewal calendared ☐ Special employer designation: ☐ "Client is a special employer of placed workers for workers' compensation purposes" ☐ "Client is NOT a special employer" ☐ Silent ⚠️ State this expressly. The default is a doctrine, not a term, and it decides whether an injured worker can sue the Client.

8. Insurance. GL $______ · EPLI $______ · Auto $______ where driving is involved · Additional insured on form ______ · Waiver of subrogation ☐ · Certificates annually, read not filed ☐

9. Indemnity. Mutual ☐ Mirrors the wage and safety allocations ☐ ⚠️ Backed by insurance ☐ (an indemnity from a thinly capitalized agency is worth its balance sheet)

10. Screening. Scope ______ Adverse action steps performed by ______ ⚠️ If Client decides on Agency's report, Client is a user with its own obligations.

11. Verification. "Agency completes employment eligibility verification. Client shall not re-verify." ⚠️ Client re-verification is itself a violation.

12. Conversion fee. Amount ______ Period ______ Definition of a hire ______ Notice obligation ______ ⚠️ Binds Client, not usually the worker.

13. Records and audit. Retention ______ Access ______ Cooperation in any investigation or claim ☐

14. Termination and transition. Notice ______ What happens to placed workers ______ Who tells them ______

⚠️ 15. THE CLAUSE TO REFUSE. Any term making a worker's wage or safety remedy the exclusive responsibility of one party. It binds neither the worker nor a regulator and creates a false sense of protection.

Tool 2 — Joint employment audit, by statute

⚠️ Run one row at a time. Never answer the general question.

JOINT EMPLOYMENT ANALYSIS — Client ______ Agency ______ Date ______ Analyst ______

Statute / purpose	Test	Key facts	Joint employer?
Wage and hour — 29 U.S.C. § 203	Economic reality	hire/fire ______ supervise ______ set pay ______ records ______ premises/equipment ______	⚠️ ______
Overtime / regular rate — 29 U.S.C. § 207, 29 C.F.R. Part 778	Same	______	______
Exemptions — 29 C.F.R. Part 541	Duties, not titles	______	______
Discrimination — 42 U.S.C. § 2000e	Control	______	______
Disability / accommodation — 42 U.S.C. § 12112	Control	______	______
Labor relations — 29 U.S.C. § 152	⚠️ Standard in effect when charged	reserved control? ______ exercised? ______	______
Undefined statutes	Common-law agency	______	______
Safety — 29 U.S.C. § 654	Both usually employers	______	______
Workers' compensation	Borrowed servant / special employer	consent ______ whose work ______ right to control details ______	______
Verification — 8 U.S.C. § 1324a, 8 C.F.R. Part 274a	Agency only	______	Client: No

Authorities: common-law agency — Nationwide Mutual Insurance v. Darden, factors from Community for Creative Non-Violence v. Reid, control focus in Clackamas Gastroenterology Associates v. Wells; labor relations joint employers — Boire v. Greyhound Corp., with 29 U.S.C. § 157 and 29 U.S.C. § 158 consequences. State client liability statute? ☐ Yes — cite ______ ⚠️ If so, the indemnity is a claim against the agency, not a defense to the worker.

Tool 3 — Pre-placement diligence sheet (client)

AGENCY DILIGENCE — Agency ______ Completed ______ By ______ Review annually ______

☐ ⚠️ Workers' compensation certificate — carrier ______ policy no. ______ expires ______ correct legal entity? ☐ correct coverage territory? ☐ An uninsured agency transfers direct compensation liability and destroys exclusivity. ☐ General liability $______ EPLI $______ Auto $______ ☐ Additional insured form ______ ☐ Waiver of subrogation ☐ ☐ Payroll audit right negotiated ☐ frequency ______ ☐ Verification practice confirmed — agency completes; client does not re-verify ☐ ☐ Screening practices — scope ______ adverse action steps ______ ⚠️ will the client direct decisions on reports? ☐ (if so, the client is a user with its own obligations) ☐ Exemption classifications for placed workers reviewed against actual duties ☐ ☐ Financial capacity — is the indemnity backed by insurance rather than a balance sheet? ☐ ☐ ⚠️ NO-POACH SCREEN — any agreement with this agency, or among clients, not to hire each other's workers? ☐ Any understanding about temp pay rates? ☐ If yes to either: STOP IT TODAY. 15 U.S.C. § 1 — prosecuted criminally, and not made lawful by appearing in a services contract. ☐ State client liability statute applicable? ______ ☐ Sector-specific check: ☐ warehousing — pre-shift time, peak overtime ☐ ⚠️ sanitation shifts — highest-risk configuration ☐ construction — multi-employer worksite, prevailing wage ☐ healthcare — licensure, credentialing, malpractice allocation ☐ hospitality — tip credit tracking ☐ clerical — exemption and salary basis ☐

Tool 4 — Payroll reconciliation worksheet

⚠️ Run quarterly on a sample of ten placed workers. This is the audit that prevents the claim.

RECONCILIATION — Period ______ Sample ______ workers Performed by ______

Worker	Client clock hours	Agency paid hours	Variance	Cause	Resolved
______	______	______	______	______	☐

TEST SPECIFICALLY FOR: ☐ ⚠️ Pre-shift and post-shift time — badge-in to station ☐ security screening ☐ waiting for equipment ☐ mandatory pre-shift meetings ☐ donning/doffing ☐ The client knows about these; the agency does not; neither records them. The most common finding in staffing wage cases. ☐ ⚠️ Overtime across two assignments through the same agency in one week ☐ ☐ ⚠️ Bonuses paid directly by the client and excluded from the regular rate ☐ ☐ Automatic meal deductions where the operation does not permit the break ☐ ☐ Rounding applied to client clock data — neutral? ☐ ☐ Exemption classification — impressive title, non-exempt duties ☐ ☐ Shift differentials and attendance incentives in the regular rate ☐

EXPOSURE IF UNCORRECTED — minimum wage 29 U.S.C. § 206 · overtime 29 U.S.C. § 207 · liquidated damages and fees 29 U.S.C. § 216 ⚠️ Joint and several. "We paid the agency" is not a defense — the client paid an invoice, not wages. Findings ______ Back pay issued ______ Process change ______

Tool 5 — Site orientation record

⚠️ Before the first shift. Per worker. This document answers the citation.

SITE ORIENTATION — Worker ______ Agency ______ Site ______ Date ______ (must precede first shift ______)

Delivered by ______ Title ______ Duration ______

Covered: ☐ Site layout, exits, assembly point ☐ Emergency procedures and who to call ☐ First aid location ☐ Specific hazards at this site: ______ ☐ Equipment this worker will use: ______ ☐ Training provided ☐ Competency observed ☐ ☐ Protective equipment required ______ ☐ Issued ☐ Fit checked ☐ ☐ Lockout and machine guarding rules where applicable ☐ ☐ Powered industrial truck authorization, if applicable ☐ (a recurring gap) ☐ Chemical hazards and safety data sheet location ☐ ☐ ⚠️ Stop-work right explained — "You may refuse work you reasonably believe is unsafe without losing this assignment or your pay." ☐ ☐ Who to report a hazard, an injury, or harassment to — at the client AND at the agency ______ / ______ ☐ Break and meal timing, and how to record time ☐

Worker acknowledgment: "I received this orientation and understand it." ______ Date ______ Copy to agency on ______ ☐ Retained by client ☐

Tool 6 — Safety allocation matrix

ALLOCATION — Site ______ Agreement version ______

Item	Agency	Client	Documented where
General safety awareness training	✔		Agency training file
Hazard inquiry before placement	✔		Requisition + site visit report
Site-specific hazard training		✔	Tool 5
Equipment and machine training		✔	Tool 5
Protective equipment (site-specific)		✔	Issue log
Day-to-day safety supervision		✔	Supervisor records
Injury and illness recording	☐	☐	follows day-to-day supervision
Site-visit right	✔	permit	Visit reports
Stop-work right	both honor	both honor	Orientation + policy

MULTI-EMPLOYER WORKSITE ROLES — for each identified hazard: | Hazard | Creating | Exposing | Correcting | Controlling | |---|---|---|---|---| | ______ | ______ | ______ | ______ | ______ | ⚠️ A staffing client is very often the controlling AND exposing employer at once, and the agency is an exposing employer with no site presence — which is exactly why the site-visit right matters. An agency that placed workers into a hazard it never looked at has a weak answer.

AGENCY SITE VISIT REPORT — Date ______ By ______ Job observed ______ Hazards seen ______ PPE in use? ☐ Orientation confirmed for ______ workers ☐ Concerns raised with client ______ Response ______ Obligations run under 29 U.S.C. § 654, within 29 U.S.C. § 651, standards at 29 C.F.R. Part 1910.

Tool 7 — Injury response and third-party screen

⚠️ The most time-critical document in this toolkit. Exclusivity will foreclose the obvious defendant.

INJURY — Worker ______ Date/time ______ Site ______ Task ______

IMMEDIATE ☐ Aid ☐ Emergency services ☐ Scene secured ☐ Both agency and client notified ☐ WITHIN THE HOUR ☐ Photographs — scene, equipment, guarding, PPE ☐ Witnesses including other contractors ______ ☐ Equipment and maintenance history preserved ☐ Training and orientation records pulled as they existed ☐

COMPENSATION POSTURE ☐ Whose policy responds ______ Claim no. ______ ☐ ⚠️ Is the client a SPECIAL EMPLOYER under this State's borrowed servant doctrine? ☐ Yes ☐ No ☐ Narrowed — cite ______ • Worker consented to work for the client? ______ • Work essentially the client's? ______ • Client had the right to control details? ______ ☐ Did the agreement expressly designate, or expressly decline, special employer status? ______ ☐ Was the agency uninsured? ⚠️ If so, the client may face direct compensation liability and lose exclusivity.

⚠️ THIRD-PARTY DEFENDANT SCREEN — COMPLETE IN THE FIRST WEEK ☐ Equipment manufacturer ______ ☐ Component supplier ______ ☐ Maintenance contractor ______ ☐ Property owner ______ ☐ Another contractor on site ______ ☐ Staffing agency (if the client is the employer) ______ ☐ Product distributor ______ Preservation letters sent to each on ______ ☐ This is usually the only real avenue for a badly injured temp, and nobody else will look for it.

OTHER ☐ Intentional tort exception considered ______ ☐ Safety citation exposure for both parties assessed ☐ ☐ Recording obligation assigned ______

Tool 8 — Replacement request log and adverse action controls

⚠️ A client requesting replacement for a discriminatory reason has directed an adverse action; the agency complying has taken one. An agency that never asks why has built a liability pipeline.

REPLACEMENT REQUEST LOG — Agency ______ Client ______

Date	Worker	Requested by	Stated reason	Agency inquiry made	Outcome	Reassigned?
______	______	______	______	☐	______	☐

AGENCY SCRIPT: "We can do that. So the file is complete, what's the reason for the request?" ⚠️ Ask every time. Record the answer verbatim. RED FLAGS ☐ reason relates to a protected characteristic ☐ reason is "not a fit" with no specifics ☐ request follows a complaint about pay, safety, or harassment ☐ request follows an accommodation request ☐ request follows a pregnancy or injury disclosure ☐

HARASSMENT REPORT PROTOCOL ☐ Received by ______ on ______ ☐ Raised with the client on ______ ☐ Correction sought ______ ☐ Client response ______ ☐ ⚠️ Reassignment offered ONLY if the worker prefers it — worker's stated preference ______ documented ☐ An agency that ends the assignment instead of addressing the complaint has probably retaliated: the worker lost the job and the harasser did not.

SCREENING ADVERSE ACTION ☐ Pre-adverse notice with the report and rights summary, sent ______ ☐ Dispute window ______ days ☐ Final notice ______ ☐ Who made the decision — agency ☐ client ☐ (if the client, it is a user with its own obligations)

Tool 9 — Preservation demand and claim evaluation

A. PRESERVATION DEMAND — send to BOTH entities

"You are directed to preserve and not delete or overwrite, for [worker(s)] from ______ to ______ : CLIENT — time clock data in raw form; badge and access records; shift schedules; site orientation records; safety training records; supervisor assignment records; bonus and incentive payments made directly; replacement requests and reasons; injury, near-miss, and inspection records; equipment maintenance history; video of the work area. AGENCY — payroll registers and pay stubs; time records as received and as paid; the assignment history with hazards disclosed; general safety training records; site-visit reports; the screening file and adverse action correspondence; verification records; harassment and safety complaints with responses; the compensation policy and certificates; all communications with Client regarding this worker. Confirm preservation in writing within five business days and state the retention interval of each system."

B. CLAIM EVALUATION ☐ 1. Name both entities; plead joint employment under the statute-specific test (Tool 2) ☐ 2. ⚠️ The client's own time clock is usually better evidence than the agency's payroll ☐ 3. Wage components: pre-shift/post-shift ______ combined-assignment overtime ______ direct bonuses ______ meal deductions ______ exemption ______ ☐ 4. ⚠️ Injury: identify the non-employer defendant immediately (Tool 7) ☐ 5. Discrimination or harassment — both entities, different theories ☐ 6. Retaliation where the assignment ended after a complaint ☐ 7. State client liability statute ______ ☐ 8. Damages per workweek, no netting; add liquidated damages and fees

Tool 10 — Day labor record card

⚠️ Pocket-sized. A day laborer is an employee of whoever hires them for the day.

BEFORE YOU GET IN THE VEHICLE ☐ ⚠️ PHOTOGRAPH THE VEHICLE AND LICENSE PLATE (the single most useful step available) ☐ Get a name ______ and phone number ______ ☐ Agree the rate ______ and expected hours ______ out loud, with a witness ______ ☐ Ask what the work is ______ and what equipment will be provided ______

DURING THE DAY ☐ Start time ______ End time ______ Breaks ______ ☐ Address of the job ______ ☐ Photograph the site ☐ ☐ What work was actually performed ______ ☐ Names of others on the crew ______

WATCH FOR ☐ Nonpayment ☐ Underpayment against the agreed rate ☐ ⚠️ Deductions for transportation, tools, or equipment driving pay below the minimum ☐ Dangerous work with no training or protective equipment ☐ Pressure not to report an injury ☐ Immigration threats

⚠️ Wage and safety laws apply regardless of immigration status, though remedies differ — cf. Hoffman Plastic Compounds v. NLRB. IF UNPAID ☐ Written demand with the date, address, hours, and rate ☐ State labor agency complaint ______ ☐ State wage theft statute — criminal penalties? ☐ wage lien? ☐ ☐ Day labor center record ______ ☐ Municipal ordinance requiring written terms? ______

Tool 11 — No-poach and wage-fixing compliance screen

⚠️ Prosecuted criminally. Not made lawful by appearing in a services contract.

SCREEN — Conducted ______ By ______

☐ Any agreement or understanding with a staffing agency not to hire its workers, beyond a bona fide conversion fee? ______ ☐ Any agreement with another client of the same agency not to hire each other's placed workers? ______ ☐ Any agreement among agencies not to recruit each other's workers? ______ ☐ Any exchange of current or forward-looking pay information for temp positions, directly or through an intermediary or benchmarking service? ______ ☐ Any understanding about bill rates or pay rates for placed workers? ______ ☐ Any such term in a services agreement, MSA, or side letter? ______

IF ANY ANSWER IS YES ☐ Stop the conduct today ☐ Preserve documents ☐ Notify counsel immediately ☐ Assess self-reporting ☐ PERMITTED, by contrast: a reasonable conversion fee for a direct hire from the agency that recruited the worker; ancillary restraints genuinely necessary to a legitimate collaboration, narrowly drawn and reviewed by counsel. ⚠️ A conversion fee binds the client, not usually the worker. Worker restrictive covenants face ordinary enforceability analysis, including State bans on covenants for low-wage workers.

Tool 12 — Authority reference sheet

WAGE AND HOUR ☐ Definitions and coverage — 29 U.S.C. § 203 · minimum wage 29 U.S.C. § 206 · overtime 29 U.S.C. § 207 · enforcement 29 U.S.C. § 216 ☐ Exemptions 29 C.F.R. Part 541 · regular rate 29 C.F.R. Part 778

STATUS AND JOINT EMPLOYMENT ☐ Nationwide Mutual Insurance v. Darden · Community for Creative Non-Violence v. Reid · Clackamas Gastroenterology Associates v. Wells ☐ Labor relations — 29 U.S.C. § 152, 29 U.S.C. § 157, 29 U.S.C. § 158; Boire v. Greyhound Corp. ☐ Arbitration context — Epic Systems Corp. v. Lewis

SAFETY, DISCRIMINATION, VERIFICATION ☐ 29 U.S.C. § 651 · 29 U.S.C. § 654 · 29 C.F.R. Part 1910 ☐ 42 U.S.C. § 2000e · 42 U.S.C. § 12112 ☐ 8 U.S.C. § 1324a · 8 C.F.R. Part 274a · remedies limit — Hoffman Plastic Compounds v. NLRB ☐ Antitrust — 15 U.S.C. § 1

Related Documents

• The Job That Is Not a Job: How Gig and Platform Work Law Actually Works
• Gig and Platform Work: A Comprehensive Guide to Classification, Deactivation, Insurance Gaps, and Pay Transparency
• Two Employers, One Worker: How Staffing and Joint Employment Law Actually Works
• Staffing Agencies and Joint Employment: A Comprehensive Guide to Co-Employment, Wage Liability, Safety, and Contracts
• Using a Staffing Agency or Pursuing a Temp Worker Claim: A Practical Checklist
• The Crew That Follows the Harvest: How Farm Labor Law Actually Works
• Farm Labor and Agricultural Workers: A Comprehensive Guide to MSPA, H-2A, Wages, Housing, and Field Standards
• The Illness That Arrives Thirty Years Late: How Occupational Disease Claims Actually Work
• Occupational Disease and Latent Exposure: A Comprehensive Guide to Causation, Exclusivity, Bankruptcy Trusts, and Apportionment
• Worker Classification: A Comprehensive Guide to Employee Status, Contractor Tests, and Misclassification Claims
• Classifying Workers: Employee or Independent Contractor — A Practical Checklist
• The Worker Classification and Misclassification Toolkit
• The Hours You Worked and Were Not Paid For: How Wage Theft Actually Happens
• Wage and Hour Law: A Comprehensive Guide to Minimum Wage, Overtime, Tips, and Recordkeeping
• The Wage and Hour Claim Toolkit
• The Hazard Everyone Walked Past: How Workplace Safety Law Actually Operates
• Workplace Safety: A Comprehensive Guide to OSHA Standards, Inspections, Citations, and Retaliation
• The Workplace Safety and OSHA Toolkit
• Hurt at Work: How a Workers Compensation Claim Actually Moves
• Employment Discrimination Charges: A Comprehensive Guide to Title VII, the ADEA, the ADA, and the EEOC Process
• Whistleblower and Retaliation Claims: A Comprehensive Guide to Protected Activity, Causation, and Remedies
• The Clause You Clicked Past: How Arbitration Agreements Take Your Case Out of Court
• Arbitration: A Comprehensive Guide to Agreements, Compelling, Hearings, Awards, and Vacatur
• One Case for Ten Thousand People: How Class Actions Actually Work
• Class Actions and Mass Claims: A Comprehensive Guide to Certification, Settlement, and Recovery
• Labor Relations and Unions: A Comprehensive Guide to Organizing, Bargaining, Unfair Labor Practices, and Grievances
• Starting and Running a Small Business: A Comprehensive Guide to Entity Choice, Licensing, Contracts, and Employees
• The Wage the Government Sets: How Prevailing Wage Law Actually Works
• Prevailing Wage and Public Works: A Comprehensive Guide to Davis-Bacon, Classifications, Certified Payroll, and Enforcement
• The Badge That Is Not a Badge: How Private Security and Investigator Law Actually Works
• Hiring and Background Checks: A Comprehensive Guide to Applications, Screening, and Offers