Tenure Policies: Co-Employment and Tenure
Last summer I took part in the CCWP Certification course and the best insights about tenure and co-employment risk came from the facilitator, Eric Rumbaugh. He said if a contingent worker gets hurt on the job, it doesn’t matter if he has worked there for three days, three weeks, three months or three years, he is still considered a co-employee and you may be liable for any workers’ compensation claims. So, unfortunately though co-employment can be mitigated, it is not going to be eliminated.
But let’s take a step back and look at co-employment in another way.
In many cases, it’s a benefit to be considered a co-employer. As a co-employer, you can avoid financial burdens and protect intellectual property. And whether you like it or not, you’re likely already a co-employer.
From my experience, about 50 percent of customers want to mitigate co-employment risk by having a tenure policy. The most stringent policy I have seen is a worker is allowed to work for six months, with the possibility to extend for another six months. After that the worker must take a three month break in service. The most flexible is a 36-month policy, after which a six-month break in service is required.
When planning a tenure policy, think about the ramp up time for your workers. If it takes six weeks to get a flexible worker fully up to speed, does it make sense to end that workers assignment in four-and-a half additional months? Perhaps tenure policies should vary based on the level of skill and ramp up time required for the position.
If you’re concerned about co-employment risk, ask yourself these questions:
- Do you have contingent workers who sit on site? Do they use your equipment (computers, printers, etc.)?
- Do they have access to your security networks and other confidential information?
- Are you or your hiring managers dictating hours of work and method of work?
If you answered “yes” to any of these questions, you are a co-employer.
Setting tenure limits helps to mitigate risk, but what is the right limit? Do you measure that in terms of hours, days, months? If you are measuring tenure in months, what constitutes a month worked? An hour, a day, a week?
So instead or, or in addition to a tenure policy, I recommend looking into additional ways to mitigate co-employment:
- Establish partnerships with your suppliers. Ensure they know your culture. If they have good relationships with your hiring managers, they’ll know the right candidates to find and hiring managers know where to go when there are performance issues.
- Ensure suppliers are present when discussing worker performance. In an ideal situation, suppliers provide 100% of the feedback.
- Review your benefits plans to ensure they specifically exclude various types of workers: independent contractors, temporary workers, workers employed by third party firms, etc.
- Ensure suppliers have valid contracts, including appropriate indemnity clauses. Also, require workers to sign non-disclosure and non-compete agreements.