How to Handle Temporary Staff in Your AAP

The current labor market has created an increase in the discussion about temporary work. The pandemi...

Posted by Julie Dominguez, SHRM-CP, HR Consultant on January 13 2017
Julie Dominguez, SHRM-CP, HR Consultant

The current labor market has created an increase in the discussion about temporary work. The pandemic has affected the workforce in multiple ways leaving organizations needing to find short-term solutions to staffing shortages. To some federal contractors, this is not an entirely new concept; however, since it has been a few years since we blogged about this topic, we felt it was time for a refresher on how to handle temporary workers in an annual Affirmative Action Plan (AAP).

The term "employee" as used in the AAP regulations in 41 CFR Part 60‐2, is broad enough to include part‐time, temporary, and full‐time employees. Therefore, it would appear that the OFCCP already requires contractors to include temporary employees in their AAPs. Further, the OFCCP directs its compliance officers to check on whether a contractor has in fact, included these temporary employees in the AAP during an audit. The Federal Contract Compliance Manual (FCCM) specifically states:

“For example, a contractor may have excluded temporary workers and independent contractors from its AAP. Temporary workers who were employees as of the contractor’s AAP date should be accounted for in the AAP.” - FCCM, §2E

The key word in the regulation is “employee.” This means that when a contractor is deciding how to determine whether workers should be included in an AAP, the workers must be examined to determine whether they are to be considered “employees.” To make this decision, the contractor needs to examine whether these workers are considered “employees” just as the OFCCP does – by using the “common-law-agency” test. OFCCP’s Federal Contractor Compliance Manual explains this phrase as:

“The ‘common-law agency test’ examines the individual worker’s relationship to the contractor by assessing the following factors derived from a 1992 U.S. Supreme Court decision, Nationwide Mutual Insurance Co. v. Darden:

  • The contractor’s right to control when, where and how the individual performs the job;
  • The skill required for the job; the source of the instrumentalities and tools;
  • The location of work;
  • The duration of the relationship between the parties;
  • Whether the contractor has the right to assign additional projects to the individual;
  • The extent of the individual’s discretion over when and how long to work;
  • The method of payment; the contractor’s role in hiring and paying assistants;
  • Whether the individual’s work is part of the regular business of the contractor;
  • Whether the individual is in business; and
  • The provision of employee benefits to the individual.

While no one factor will necessarily be decisive, the factors that indicate the extent to which the contractor controls the manner and means of the individual’s performance of his or her work will typically be most important in the Darden analysis. The Equal Employment Opportunity Commission also relies on this test to determine whether individuals are employees for Title VII and ADA purposes.”

– FCCM, Key Words and Phrases

There are instances where some of the workforce may not be employees and therefore should not be included in the AAP. For example, if an organization has enlisted the help of a temporary staffing agency or if there are independent contractors engaged for a specific project, it is plausible to exclude these workers from the AAP. There could, however, be a scenario where the organization uses an agency to pay their temporary staff, but handles all other aspects of their employment, such as recruiting, hiring, supervising, disciplining, and separating. Even though the worker is not being paid by your organization, it is likely that the OFCCP would expect you to include them in your AAP because your organization is exerting the majority of control as the employer.

It is important to remember that all recruitment materials and employee records must be maintained and are subject to review in a compliance review, even if these records are being maintained by the agency. Therefore, we strongly recommend that any time an organization engages with an agency to hire or employ workers, all details regarding recordkeeping retention responsibilities are included in the contracts between the organization and the staffing agency.

In conclusion, whether a temporary worker should be included in your annual AAP warrants careful consideration. Your diligence and proactive measures will keep your compliance efforts right on track.

Julie Dominguez, SHRM-CP, HR Consultant
Julie Dominguez, SHRM-CP, HR Consultant
Julie is a consultant specializing in Affirmative Action, diversity, and inclusion from the university client’s perspective.

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