Employment Agency Insurance and Issues of Discrimination

employment agency insurance

Because of their arrangement with the people they enlist for other agencies, there are plenty of legal issues that could surface for a staffing firm. This is certainly a concern that should be addressed before an unpleasant situation arises. With all of the various state and federal laws that govern employment relationships, staffing firms face an endless number of legal pitfalls and therefore need to secure employment agency insurance to protect the company, its clients and its workers.

Staffing firms are in a very unique position. They provide sound solutions for client companies seeking to manage their own legal risks associated with their employees, but in certain situations, where there is the potential for workplace discrimination or harassment suits, staffing firms and their clients have exposures significantly different from a standard business operation. These issues are due in part to the enormous amount of turnover, and the constantly changing landscape.


Employment practices lawsuits aren’t that uncommon

Discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC) can lead to expensive litigation or costly settlements for a staffing firm. Because of this fact, more attention is now being focused on employer practices related to background checks. Businesses can face individual or class litigation suits if background checks and hiring tests result in screening out protected classes, such as minorities, at a higher rate than other groups. The EEOC has renewed its emphasis on enforcing actions from complaints in this area, and individuals continue to bring about claims based on background check screening.

These agencies often enlist recruitment offices to help supply them with job candidates, and being a business, they run the risk of sending applicants to clients who may not actually be a perfect fit for the position. Naturally, this is done in order for them to get paid and move on to their next client.

Among the many complaints made by applicants are that they may feel like they’re being pushed into positions they aren’t qualified for and companies that aren’t necessarily a good match for them,simply because the recruitment office hired by the temp agency wants to earn credits for placing these individuals quickly. There is an awful lot of risk involved in recruiting employees for different companies, and maintaining employment agency insurance is one way to mitigate many of these risks.