Temp Workers, Staffing Agencies, and Joint Employment: Who Is Responsible?
You work at a company every day, but your paycheck comes from a staffing agency. When something goes wrong — discrimination, harassment, unpaid wages, wrongful termination — you may not know who to hold accountable. California law often holds both responsible.
The arrangement is ubiquitous and deliberately confusing. A worker is hired by a staffing agency, assigned to work at a client company, and performs the same job, at the same desk, under the same supervision as the client company’s direct employees. But the worker is “employed” by the agency — at least on paper. The client company controls the work. The agency issues the paycheck. And when the worker is harassed by a supervisor at the client company, or denied overtime, or fired without explanation, neither entity wants to accept responsibility.
California law cuts through this structure with a principle that looks at the substance of the relationship, not the label: when two entities jointly control the terms and conditions of a worker’s employment, both can be liable as joint employers.
The joint employment doctrine
Under California law, a worker can have more than one employer simultaneously. The joint employment doctrine holds that when two or more entities share control over a worker’s wages, hours, or working conditions, each entity is an employer for purposes of the labor and employment statutes that apply.
The analysis looks at the totality of the circumstances, including: which entity controls the worker’s daily tasks and assignments; which entity sets the schedule; which entity supervises the work; which entity has the authority to hire, fire, or discipline the worker; which entity determines the rate of pay; and which entity provides the tools, equipment, and workspace.
In a typical staffing arrangement, the client company controls the daily work — assigning tasks, supervising performance, determining the schedule, and directing the manner in which the work is done. The agency handles payroll, benefits (if any), and the administrative aspects of the employment. Under the joint employment doctrine, both entities may be employers, and both may be liable for violations of California employment law.
What this means for discrimination and harassment
FEHA applies to employers, and joint employers are employers. When a temp worker is harassed by a supervisor at the client company, both the client company and the staffing agency may be liable — the client company because its supervisor committed the harassment, and the agency because it is a joint employer with an obligation to ensure that its employees are not subjected to unlawful conduct.
The client company cannot escape liability by arguing that the worker is “not our employee.” If the client company exercises sufficient control over the worker’s conditions of employment, it is an employer under the joint employment doctrine, and FEHA’s prohibitions apply.
The staffing agency cannot escape liability by arguing that it did not know about the harassment. As a joint employer, the agency has an obligation to take reasonable steps to prevent harassment and to respond appropriately when it learns that harassment has occurred. An agency that places a worker at a client site, learns that the worker is being harassed, and does nothing — or that simply removes the worker from the assignment as a substitute for addressing the harassment — has not fulfilled its obligations.
Wage and hour liability
Joint employment has significant implications for wage and hour claims. Under Labor Code section 2810.3, a client employer that obtains workers through a labor contractor shares all civil legal responsibility and civil liability with the labor contractor for the payment of wages, the provision of workers’ compensation coverage, and compliance with workplace safety requirements.
This means a temp worker who is not paid overtime, who is denied meal and rest breaks, who is not reimbursed for business expenses, or who is misclassified as an independent contractor can pursue claims against both the staffing agency and the client company. The client company cannot insulate itself from wage liability by routing the employment relationship through a third-party agency.
Section 2810.3 also prohibits a client employer from shifting legal duties to the labor contractor through contract. A provision in the staffing agreement stating that the agency is solely responsible for wage compliance does not bind the worker and does not eliminate the client company’s statutory liability.
Wrongful termination
When a temp worker is terminated — either by the agency ending the assignment or by the client company requesting the worker’s removal — the analysis of wrongful termination applies to both entities.
If the client company requests the worker’s removal because of the worker’s race, sex, age, disability, or other protected characteristic, the client company has engaged in discrimination. If the agency complies with the request without questioning the reason, the agency may also be liable for participating in the discriminatory termination.
If the worker is removed from an assignment in retaliation for reporting harassment, filing a wage claim, requesting a disability accommodation, or engaging in any other protected activity, both the entity that initiated the removal and the entity that carried it out may be liable for retaliation.
The practical dynamic is that temp workers are often terminated without explanation — the agency simply tells the worker that the assignment has ended, without disclosing that the client company requested the removal or why. This opacity does not shield either entity from liability. In discovery, the communications between the agency and the client company — including the reason the client requested the worker’s removal — become available, and the true reason for the termination is subject to the same pretext analysis that applies in any wrongful termination case.
The vulnerability of temp workers
Temp workers are among the most vulnerable employees in the California workforce. They are typically paid less than direct employees performing the same work. They often lack benefits. They can be removed from an assignment without notice or explanation. And they frequently believe — because they are told, or because they assume — that their temporary status means they have fewer rights.
They do not. California employment law applies to temporary employees, staffing agency employees, and contract workers with the same force it applies to direct hires. Minimum wage, overtime, meal and rest breaks, anti-discrimination protections, anti-retaliation protections, and the right to a workplace free from harassment all apply — regardless of whether the worker is labeled “temporary,” “contract,” or “contingent.”
A temp worker who is uncertain about which entity to hold responsible should consult with an attorney. The joint employment doctrine ensures that the worker is not left without recourse simply because two entities have structured their relationship to make accountability difficult to assign.
If you work through a staffing agency and have experienced discrimination, harassment, wage theft, or wrongful termination at the client company, both entities may be responsible. The structure of the arrangement does not determine the scope of your rights — California law looks at who controls the work, and it holds all employers accountable.
This article is general information about California law and is not legal advice. Every situation turns on its particular facts.