How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask wallstreetfighter Your Own Question
wallstreetfighter
wallstreetfighter, Employment Lawyer
Category: Employment Law
Satisfied Customers: 17080
Experience:  14 years exp, General counsel for National Corp. firms, Hostos College instructor, Represented employees in discrimination lawsuits
16356563
Type Your Employment Law Question Here...
wallstreetfighter is online now
A new question is answered every 9 seconds

I have a small Temporary Employment Agency where my clients

This answer was rated:

I have a small Temporary Employment Agency where my clients tells us they need someone on a temporary basis (working 40 hrs/week M-F 9-5) at there site. These are senior computer related positions and go for multiple years. We find candidates for them, they interview and if they like, they give us a go ahead. Client pay us a fixed hourly rate for this candidate, we in turn pay a salary (around 110K per year) to this selected candidate and benefits (paid vacation days, medical ins), and keep the difference as our profit. This profit is normally around $10/hr. Once the Client temporary work is over (it can go multiple years, quite common) the candidate is no longer on our payroll and finds another job / files for unemployment.

My question is if we hire someone for above position who falls under USERRA, and if the person is asked to go on duty for 3 months, what is our responsibility. Since this candidate has no employment with our client, client is not obligated to take him back as contractor. And we cannot use his services as we are not a computer company but just a temp placement agency. We have only 7 people on our payroll so we are not big enough to even absorb the persons cost.

wallstreetfighter :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification

wallstreetfighter :

Since he is hired as an employee,

wallstreetfighter :

you would be liable under the law, to keep his job open when he returns,

wallstreetfighter :

and provide 24 months of health insurance,

wallstreetfighter :

you are not required to pay a salary,

Customer:

- what options do we have, since though we have hired him, he is working at our client site full time and not our facility

Customer:

and he has only been hired after client has interviewed and pproved him

wallstreetfighter :

This is a problem, unless you can work out an arrangement with the client to hire him as an employee, you are obligated under Federal law as the employer

wallstreetfighter :

if he is deployed,

wallstreetfighter :

the client would not be coevered,

wallstreetfighter :

so when he returns,

wallstreetfighter :

you would have to pay him even if he has no client, and that will be an issue,

Customer:

however we do not internally have such positions, so where will we hire such a senior computer specialist. All our internal staff consists of is administrative personnel and recruiters.

wallstreetfighter :

You would hire him, and if you do not have a client for him when he returns,

wallstreetfighter :

he can be terminated as there is no lack of employment,

wallstreetfighter :

What you need to do is have a contract written for him that states he will only be paid once a client accepts his employment, and that you are a staffing company only,

wallstreetfighter :

  1. Be aware, the law allows an exception of the requirement to hire him to the same position, under the law, you can show that the prior employment was for a “brief and nonrecurrent period” and could not reasonably be expected to continue indefinitely or for a significant period

wallstreetfighter :

If you can show this, where in your case you could, you would be fine

Customer:

Thats great.

Customer:

Just to make it easier, would it help our case if we pay him an hourly rate on W2 .. say $50/hr of work done at our client on W2 + medical insurance, instead of a fixed yearly salary.

wallstreetfighter :

I would still have the employees sign a contract stating that you are a staffing company, and wages are paid as per client approval only. Also mention if there is no work or clients, they will not be paid.

Customer:

Absolutely

wallstreetfighter :

Yes, that would be better, however have him sign a contract,

Customer:

You mentioned about medical insurance to be paid for 24 months, now who would pay for this medical insurance, as such as compnay policy is that We pay 10% of the premium and Employee pays 90% of the premium (deducted pre-tax from there pay)

wallstreetfighter :

USERRA gives an employee the right to elect continued health insurance coverage, for himself or herself and his or her dependents, during periods of military service. For periods of up to 30 days of training or service, the employer can require the person to pay only the normal employee share, if any, of the cost of such coverage. For longer tours, the employer is permitted to charge the person up to 102 percent of the entire premium. If the employee elects coverage, the right to that coverage ends on the day after the deadline for him or her to apply for reemployment or 24 months after the absence from the civilian job began, whichever comes first.


USERRA gives an employee and previously covered dependents the right to immediate reinstatement of civilian health insurance coverage upon return to the civilian job. The health plan cannot impose a waiting period and cannot exclude the returning employee based on preexisting conditions (other than for those conditions determined by the Federal government to be service-connected). This right is not contingent on an election to continue coverage during the period of service. (Section 4317)

Customer:

So this means, that our employee will pay 90% premium (as per our company policy) for 30 days, and than he will pay 102% (max) for the medical ins.

wallstreetfighter :

yes,

Customer:

Thank you so much, you are very thorough.

wallstreetfighter :

good luck, and if you have any questions please do not hesitate to ask.

wallstreetfighter :

If satisfied please provide us with positive feedback,

wallstreetfighter and 4 other Employment Law Specialists are ready to help you

Related Employment Law Questions