The Equal Employment Opportunity Commission (EEOC) administers and enforces several federal employment discrimination protection laws including the Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act of 1964 (Title VII) and the Equal Pay Act (EPA).  The EEOC's Enforcement Guidance on the Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms" provides guidance regarding the application of the non-discrimination statues to temporary, contract and other contingent workers.

In most circumstances, a staffing firm’s workers are considered to be   "employees" of that firm.

Test: A worker is a covered employee under federal non-discrimination statutes if the right to control the means the means and manner of his or her work performance rests with the staffing firm and/or its client rather than with the worker him/herself.

Status is Determined by Who Controls, Not Designations in Employment Contracts

Designations of worker status that may be used in employment contracts do not determine a worker’s status. Consideration must be given to all aspects of the worker’s relationship with the firm and the firm’s clients. Many factors are considered in determining worker status. Most concern the question of control.

Factors Considered in Determination of Employee Status

Under the EEOC Guidance a worker determined to be an "employee" covered by federal employment discrimination laws if:

• The firm or client has the right to control when, where and how the worker performs the job;
• The work does not require a high level of skill or expertise
• The or firm or client rather than worker furnishes the tools, materials and equipment
• The work is performed on the premises of the firm or client
• There is a continuing relationship between the worker and the firm or client
• The firm/client sets the hours of work and duration of the job
• The worker is paid by the hour, week, or month rather than for the agreed cost of performing a particular job
• The worker has no role in hiring and paying assistants
• The work performed by the worker is part of the regular business of the firm or client
• The firm or the client is itself in business
• The worker is not engaged in his or her own distinct occupation or business
• The firm or client provides the worker with benefits such as insurance, leave, or worker’s compensation
• The worker is considered an employee of the firm or the client for tax purposes (i.e. the entity withholds federal, state and Social Security taxes)
• The firm or client can discharge the worker
• The worker and the firm or client believe that they are creating an employer-employee relationship

It should be noted that not all or even a majority of these criteria need be met . According to the EEOC Guidance, the fact-finder must make an assessment based on all of the circumstances in the relationship between the parties.

Joint Employment

If it is established that a staffing firm worker is an "employee", the question of "who is the worker’s employer?" arises. The staffing firm and/or its client will qualify as the worker’s employer(s) if one or both businesses have the right to exercise control over the worker’s employment. No one factor is decisive, however. All factors involved with each employer must be considered. If either or both parties qualifies as the worker’s employer, and if that employer has the statutory minimum number of employees, then it can be held liable for unlawful discriminatory conduct against the worker.

If both the staffing firm and its client have the right to control the worker, and both meet statutory minimum requirements, they are covered as "joint employers".

a. Staffing agencies and their workers generally qualify as employer-employee relationships  because the firm typically hires the worker, determines when and where the worker             should report to work, pays the wages, is itself in business, withholds taxes and social              security, provides workers compensation coverage and has the right to discharge the              worker. In addition, the intent of the parties typically is to establish an                               employer-employee relationship.

b. Business/ clients of staffing firms typically qualify as employers of the temporary worker during the job assignment, along with the agency, because the client usually exercises significant supervisory control over the worker.

For more details and examples see EEOC Guidance: Application of EEO Laws to Contingent Workers (EEOC Notice No. 915.002, December 3, 1997).