In two recent cases, the U.S. Second Circuit Court of Appeals held that when a staffing agency places a temporary employee with an employer, the agency and the employer are each liable for certain employment decisions made by the other. In Chao v. Gotham Registry, a staffing agency supplied temporary nurses to a hospital. The staffing agency, which paid the nurses, required prior agency approval for overtime. Nonetheless, the hospital directly asked some of the nurses to work overtime, and those nurses did not seek prior approval of the staffing agency. The court held that the staffing agency is liable for their overtime pay even though the nurses did not seek prior approval of overtime from the staffing agency. In Barfield v. New York City Health & Hosp. Corp., decided August 8, 2008, a certified nurse assistant signed up with three staffing agencies. Each of the three agencies placed her at the same hospital, Bellevue Hospital. She was paid by the agencies, not the hospital. She did not work 40 hours in a week for any one of the three agencies but, in total, she worked at Bellevue Hospital more than 40 hours in a week. The court held that the hospital (not the staffing agencies, but the hospital) owes her overtime pay. The lesson is that staffing agencies and employers should work together and coordinate a policy on overtime for temporary employees so that neither the agency nor the hospital requests the employee to work overtime unless at least one of them (the agency or the hospital) is willing to pay the employee overtime pay. This lesson goes well beyond wage and hour issues. Many other forums and laws, including civil rights and labor issues, often find joint employer status between staffing companies and primary employers. Another interesting (and horrifying) aspect of Barfield is the attorney’s fee award. Ms. Barfield claimed that Bellevue Hospital owed her a total of $887.25 in overtime pay. The court agreed. So the court ordered Bellevue Hospital to pay her $887.25, plus an equal amount in liquidated damages. Thus, the total amount of “damages” was $1,744.50. But it did not end there. Believe it or not, the court ordered Bellevue Hospital to pay to Ms. Barfield’s attorney $49,889.00 and another $6,565.79 in cost reimbursement! The Second Circuit affirmed the order. Thus, Bellevue Hospital, which owed Ms. Barfield $887.25 in overtime pay, had to pay a total of $58,229.29! Plus, Bellevue Hospital had to pay its own attorney fees. Brody and Associates regularly counsels management on complying with labor and employment laws (federal, state, and local) as well as provides cost-effective compliance training to all levels of management. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.
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