Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Navigating Staffing Law and Legal Compliance in Today's Changing Environment
71 Plays3 months ago
The staffing industry is in constant flux, with evolving federal, state, and local regulations posing unique challenges for agencies striving for compliance and growth. In this episode of Staffing Made Simple, we’re joined by Lia Elliott, managing partner at Staffing GC, to explore some of the most pressing legal considerations agencies face.
From the complexities of immigration laws to managing intricate client contracts and operating in heavily regulated markets, this episode provides a comprehensive look at the hurdles staffing agencies must overcome. Tune in for valuable insights to help you stay compliant, competitive, and ahead of the curve in an ever-changing landscape!
Recommended
Transcript
Introduction to Staffing Industry Changes
00:00:00
Speaker
Over the past several years, the staffing industry has changed more than ever before. Rob and I have a combined 30 years in this business. We've seen a lot when it comes to staffing law, shifting regulations, new technology,
00:00:11
Speaker
evolving work models, and changing immigration laws. It's no longer business as usual. For staffing agencies, keeping up with these changes isn't just important, but it's become necessary to survive.
00:00:22
Speaker
Legal compliance has become a bigger challenge, and agencies that don't stay ahead of the curve could be putting themselves at serious risk. So, how do we navigate all this without losing our minds? Well, if you're in staffing, stick with us. We've got you covered.
00:00:43
Speaker
Welcome to staffing made simple, a podcast series powered by simple VMS.
Introducing 'Staffing Made Simple' Podcast
00:01:01
Speaker
Hey everyone. Welcome to staffing made simple brought to you by simple VMS, the most vendor friendly VMS on the market. I'm Casey Wagonfield, a 17 year staffing industry vet. subject matter expert at Simple VMS and co-host of this podcast.
00:01:15
Speaker
Our goal for this podcast, to make staffing easier by tackling the toughest challenges in the industry with practical strategies that actually work. And joining me today, my co-host Rob Geis, Senior Vice President of Growth and founding member of Simple VMS.
Complexities of Legal Compliance in Staffing
00:01:30
Speaker
Rob, always a pleasure, my friend. Pleasure is all mine, Casey. Thank you. All right. Today we're diving into one of the trickiest parts of staffing, which is staying compliant with staffing laws.
00:01:41
Speaker
Regulations at the federal, state, and local levels are changing constantly. And if agencies don't keep up, they could be facing major headaches like lawsuits, fines, and even losing clients. So the reality is, Change isn't coming, it's already here, but there is good news.
00:01:55
Speaker
There are ways we can stay compliant without over-complicating things.
Meet Leah Elliott and Legal Challenges in Staffing
00:01:59
Speaker
And to help us break it all down, we've got an incredible guest. We're thrilled to welcome Leah Elliott. Leah is an attorney and managing partner at Staffing GC.
00:02:08
Speaker
the first legal services firm built specifically for staffing companies. Before that, she spent 15 years as general counsel at Elwood Staffing, one of the largest light industrial staffing firms in the U.S. She's been in the trenches, helping and agencies navigate compliance and legal matters while still growing their businesses.
00:02:26
Speaker
So Leah, thanks for joining us. Well, thank you, Casey and Rob. It's a complete delight to be here with you guys today. Likewise. All right, Leah, we are going to start with a big picture question. What makes the legal landscape for staffing different from any other industry?
00:02:41
Speaker
Well, I think it's a pretty multifaceted response, right? We have multiple states often that staffing firms are working within, assuming a U.S.-based operation. So you could have up to 50 different states you're operating within.
00:02:55
Speaker
And you're operating across such a diverse group of clients, right? So those end-using clients and the work sites, so many distinct work sites across the country, adds a huge amount of variation for staffing firms.
00:03:09
Speaker
And when you layer over the top of that, the high volume industry specific legislation, it feels like you're running just multiple operations across multiple clients and states and trying to keep up with all the moving parts.
00:03:22
Speaker
It can be pretty intense.
Prioritizing Legal Risks in Staffing
00:03:23
Speaker
I don't know any staffing owners or principals who are sitting around not doing anything else. And so it's not like we're bored, but... Lots of legal complexities for the staffing firms. And that doesn't even take into account the client relationships, the business side and the operational pieces, but lots of activity in that space.
00:03:43
Speaker
For sure. In staffing agencies, they deal with a ton of legal challenges, as you know. But if you had to pinpoint one of the biggest areas agencies should focus on, what would they be? Yeah, I think it's a great question and it gets to the heart of prioritizing risk.
00:03:57
Speaker
And that's something that not all firms are are really proactively engaging in on a regular basis. And not all risk is created equal. So some of it's catastrophic. Some of it will never trigger and is really inconsequential.
00:04:10
Speaker
And so from my perspective, when I think about the highest risk legal issues for a staffing firm, I'm thinking about what sits in that bucket that's going to sink the ship.
00:04:21
Speaker
That catastrophic, uninsured risk. And for me, that often falls within wage and hour for a staffing firm. We hire people, we place people to work.
00:04:32
Speaker
It's very important that we are 100% wage hour. all the time. There's really not much room for error in that space. Noncompliance there leads to class actions. It's typically uninsured, right? That that is a sink the ship issue.
00:04:47
Speaker
The secondary one, which doesn't always fall within legal's kind of responsibilities, you don't always go to your lawyers for this, but it's uninsured equally and can result in catastrophic loss, which is tax and financial compliance.
00:05:00
Speaker
Very, very important that you get your taxes right, you're withholding correctly, you're submitting on time and in correct amounts. And then for me, the third to kind of round out just sort of a top three, right now, very big topic for a lot of employers, not only for staffing firms, but data privacy protection and cybersecurity are huge in
Current Legal Concerns: Immigration and Regulations
00:05:22
Speaker
our space. so Hey, Leah, it's Rob. Those are some great points.
00:05:26
Speaker
But other than those things, what what are some other legal items that are keeping staffing agency CEOs and executives up at night? Yeah, based on the inbound calls and emails and texts that but I've been getting in the last 60 days, I would say immigration is topping the list right now. We're in a time period with a great deal of enforcement. There's a lot of end-using clients who are putting downward pressure onto their suppliers around wanting reassurances that their staffing providers are compliant with federal law with regards to work authorization and identification of workers.
00:06:06
Speaker
And so fielding ah quite a few demands in that space right now. Immigration is is definitely one thing that's keeping owners up at night. And it probably wasn't something I would have said six months ago. So really a very kind of recent development with the new administration.
00:06:20
Speaker
And then beyond that, I think we get the basic stuff, the state by state complexities we talked about. The variation between state regulation can be wide with regards to things like pay transparency, meal and rest periods, onboarding forms. or The packages can be different based on the state.
00:06:38
Speaker
That's typically a concern that maybe not owners, but definitely those that are in charge of making sure that gets done tend to lose some sleep on that. And then the third, what keeps CEOs and ownership and leaders awake at night, I think is a little bit more simple in the sense of where are we getting in our own way?
00:06:57
Speaker
Like where are we creating our own friction points and increasing our own liability potentially and our own legal risk through either inefficiencies, Not having the right process or procedure in place, not having the right people in the right seats, right? Those kinds of things really round out what I hear about keeping staffing firms awake at night.
00:07:19
Speaker
Yeah, yeah, totally makes sense. Some of these states can be so different too, right? So it's probably hard to keep up with the ever-changing laws. It's night and day. If you have a staffing firm that has operations in Kentucky and in California, you are running two very, very different operations between those two states, right? Just night and day. Yeah.
00:07:41
Speaker
Yeah. I've actually had my phone ring several times over the last you know six to eight weeks asking if I've heard of any ICE enforcement or people coming into facilities. Do you have any real world examples of that at all that that you've seen?
00:07:54
Speaker
We have, and really just in the last month or so, in January, the headlines were a lot more about the arrests and detentions, things of that nature. So we saw a lot of that.
00:08:05
Speaker
In the last month, our staffing firm clients are sharing with us that several of their clients have been subject to visits from ICE. A few have been subject to raids.
Proactive Legal Strategies and Client Education
00:08:16
Speaker
Most of those raids seemed to have been in employee-friendly states. So we saw them in Illinois, saw some in New York, New Jersey, some of those types of places, but then have recently learned from just a small handful of staffing firms that ICE had paid visits to the staffing firms, which is really a little bit on the unusual side, at least this early in the process. Because what typically happens is the end-using client is either served with a subpoena to produce I-9s,
00:08:47
Speaker
There's a raid, something of that nature. And then ICE, which is the division in charge of enforcement, goes to the suppliers to close the loop and say, let's get the full picture. So the staffing firms are kind of a tag along and a little bit of an afterthought, and whereas now they seem to be visiting. And what I've seen is basically canvassing, which is interesting, you know, going in, asking the person at the front desk,
00:09:11
Speaker
If they're aware if their employer hires any illegal immigrants, asking if they know if any of their clients are asking them to hire illegal immigrants. And it's interesting because I don't think it's staffing industry targeted because with The three clients that I've heard about this through, and they've been in more employer-friendly jurisdictions, so not the California, Illinois, New Yorks of the world, but your more employer-friendly Midwestern locations and South, they're going to every establishment within a building or within a strip mall.
00:09:44
Speaker
So it's this interesting approach that I don't think we've seen before. if They're going to agencies' offices versus the worksite. Absolutely. They're kind of tag teaming this a little bit with prioritizing raids where they know the workers are going to be and then blanketing everyone else.
00:10:00
Speaker
It's PR and kind of marketing outreach almost. It's a slippery slope, right? For your clients, they can't share this information with the end client. It's personal, private information that opens the client up to potential issues.
00:10:15
Speaker
So what steps can the staffing agencies, your clients take to protect themselves in these situations? I think that's a great question. And it's one that's definitely jumping to the front of the line right now.
00:10:26
Speaker
And a lot of this involves just training. And when I say training, I'm not talking about like a two-day conference when taking people out of their substantive day-to-day work. but really just preparing your internal team for what to do if they get a visit, if they're served with a subpoena, training that frontline person, and then extending some of that training to your clients.
00:10:53
Speaker
So I have a lot of staffing firms who are training and hosting sessions and webinars with their end-using clients to try to proactively help educate them with regards to what they're legally required to do and what they're
Handling Client Requests and Compliance Challenges
00:11:09
Speaker
not, right? What the rights of everyone are when a third party, whether it's ICE, law enforcement, or some random third party comes into your work site, what do you have to do? When do you have to do it?
00:11:21
Speaker
And their agenda when they come in is going to be to produce a result and to secure information. And you may or may not be required to produce that information on the spot. A lot of staffing firms are trying to outreach with their clients and help them to understand what the rules of engagement are. And I think end-using clients appreciate that. They want to know that their staffing partners are thinking about and proactively planning around the same things that are keeping them awake.
00:11:46
Speaker
I think it's a great way to solidify those business relationships while simultaneously reducing the risk. So what you're basically telling me is they need to get in touch with somebody like you who knows all the rules and regulations and intricacies and and to have somebody at hand because you never know when it's going to pop up.
00:12:04
Speaker
Absolutely. i mean, and they should engage with either their legal or ah HR resources, right? Develop that workflow. and And this isn't a workflow any of us really prioritized anytime last year.
00:12:16
Speaker
Because if your people get caught off guard, whoever it is that ICE would encounter when they first walk into an office or they first walk into your end-using client's worksite,
00:12:27
Speaker
that person could accidentally volunteer to let ICE into a private area that they're not otherwise entitled to be in. And that's huge. And that's what we saw with raids early on, where that front desk staff thought they had to let them in, right? They're coming in. It feels very military. They are wearing bulletproof vests. There are cameras strapped to their chest. They have weapons just like police officers on belts, right? It feels military. very intimidating to someone who's never encountered that before. So helping them to understand that this is what could walk through the door and they don't have to be an expert in it. They just need to know who to call and tell them just have a seat and I'm going to get you the right person who can talk to you about this.
00:13:11
Speaker
Have you heard from any of your clients that the end client are maybe doubling down on e-verify or requiring more We're not seeing compliant requests anyway. it's We're hearing a lot of requests coming in from end-using clients asking for things that I think they don't realize are not legal.
00:13:32
Speaker
So I've had a few, even just last week, a staffing firm called me and said, hey, one of my biggest operations manager, kind of a ah A facilities manager reached out and said they wanted to start doing E-Verify and they wanted to start with all the currently working people on assignment.
00:13:50
Speaker
That's about as illegal as it gets. And so that's really where staffing firms had the opportunity work. be that expert resource to their clients and help them not shoot themselves in their own foot. Basically saying, look, we can explore using E-Verify as a tool going forward, but we're going to do it in a way that's compliant for all of us and doesn't increase legal risk for us. And so we are seeing a lot more requests that border on being unlawful and are things that staffing firms can't legally comply with.
00:14:23
Speaker
Isn't there a unique e-verify number that could be provided to the client so at least they know that it's being done? There is, yes. And so when clients ask for things like if you're already running e-verify for your currently working people, they might ask for an e-verification number, which is the number it spits out at employment confirmation result, the employment being authorized.
Electronic vs. Paper I-9 Compliance
00:14:44
Speaker
Yeah. We also see staffing firms providing attestations to their clients and saying, you're asking for these, that's high risk. We can't just give you our I-9s. But what we can do is go in, conduct an audit and report our findings and give you an attestation that affirms under oath that our I-9s are compliant.
00:15:03
Speaker
And that does the trick quite a bit. Speaking of risk and compliance with just all the advancements with technology, I'm sure there's still agencies that use paper I-9s. Would you suggest they ditch the paper forms if possible?
00:15:17
Speaker
It is, yeah. but it's It's a double-edged sword. It's really interesting because electronic I-9s are actually more regulated than the paper I-9s, which is hard to believe given how complicated the I-9 is to begin with, right? Just the paper form is challenging enough.
00:15:32
Speaker
But with the right vendor partner and ensuring that your partner is compliant with those retention and auditing and tracking all the requirements that are required for electronic completion and retention of the I-9, assuming all those are met, absolutely go with electronic, right? You're going to reduce human errors. You can really take advantage of technology and automate.
00:15:56
Speaker
retention periods and things of that nature so you're not over retaining. And if you do still have boxes of those I-9s sitting in a warehouse from 1992 that just shipped off and nobody ever retrieved and no one's gone through since, now's a really good time to dust off the shelves and identify which I-9s are eligible for destruction, right? You're only required to keep I-9s for a very specific period of time.
00:16:22
Speaker
If you retain too many, those are subject to audit, which subjects them to penalties and fines. So you don't want to over retain, you don't want to under retain, but you don't want to retain stuff that's that old.
00:16:33
Speaker
No, that's great stuff. We're gonna switch gears here, though. um We're going to talk a little bit about the patchwork of federal, state and local regulations. There can be conflicting rules. ah So how can agencies make sure that they're staying compliant with those?
00:16:46
Speaker
Yeah, I wish there were one-size-fits-all solution. And if there were, i would have sold it and I would have retired long, long time ago. i would be joining you from Tahiti right now, but alas, I'm not.
00:16:58
Speaker
And it takes work. It has to be intentional and really compliance has to be part of the culture and an expectation within an organization. Not every staffing firm can have a legal team or a fully staffed risk team to monitor the status of all the bills being introduced across the country and the status and when they pass and when they're vetoed and when they're amended, right? It's really, really difficult to stay on top of that with essentially 50 different
Staying Connected and Succeeding in High-Regulation States
00:17:30
Speaker
countries. And that's how I've had it described to me. Some of our clients come in from other countries, either from Asia or from European countries and they
00:17:39
Speaker
They're amazed when they come. Picture that emoji with its head exploding because that's how they feel. They're like, it's so much easier to do business in every other country except this one. It's so much. And so really staying connected to the industry is so, so important. So it's it's attending webinars. It's following podcasts like this.
00:18:01
Speaker
It's subscribing to email services and for getting outside of that bubble of your own organization. So staying plugged in with industry organizations like ASA, SIA, state local chapter, Natho for healthcare organizations.
00:18:16
Speaker
They have so much of that information already distilled and tailored to our industry that it really can help you to see where you might have a blind spot that needs to be addressed.
00:18:28
Speaker
What about some of those highly regulated states? So we all know the New York and California, but there's more than just that. A lot of agencies are hesitant to go into those markets, but they have a ton of opportunity in those states.
00:18:40
Speaker
What have you seen from agencies that thrive in those states? What do they do well? Some of our clients have already been in California and they've just grown up in that space. And that's where their staffing firm started. It makes everything else seem like a cakewalk.
00:18:53
Speaker
It's all really easy to go from California to somewhere else. But we see states like Illinois and Minnesota where regulation is becoming much more prevalent and much more industry targeted. And so we're also experiencing a lot of staffing and some that go into California, but some firms are having to navigate those similar regulatory burdens.
00:19:13
Speaker
And as much as possible, they're taking us with them. They love the staffing firm and they say, I like you so much. I'm going to take you with me to Los Angeles. Awesome. You know, we need 200 people in two weeks engage as quickly as you can with your legal and ah HR professionals.
00:19:30
Speaker
I think the sooner you can do so before you enter the market, the better. That helps to frame some of the issues that you might not know about or might not be thinking about. And then those that are really successful in a state like California, you really see a centralized process for compliance Someone oversees compliance for that state.
00:19:54
Speaker
They've got really solid alignment on what sort of risk tolerances they're willing to take and what they might need to be batting 100 on. They assign owners of those risks.
00:20:06
Speaker
It's never an assumption that, well, if it's part of our onboarding process, I'm sure HR is making sure the right onboarding forms are there. No, they've mapped it out. And so mapping out and having a look at all the things in your process and seeing proactively what needs to be tweaked for that state can be really important.
00:20:27
Speaker
And beyond that, some of those states also have independent registration obligations. So staffing firms have historically not had to register for a quote unquote business license. But in states like Illinois, now there is, right? And it's actually illegal for NDs and clients to work with a staffing firm who's not properly registered under the Illinois Department of Labor.
00:20:48
Speaker
And so very important to try to get as much of a runway ahead of you as you can in those states. If you've not been in them before, just because there will be some additional administrative burden,
00:21:01
Speaker
But to your point, Casey, there's a ton of business. The pricing can compensate for your additional administrative burden and cost. No one expects the pricing in California to be the same as the pricing in Nebraska. It just simply will not.
00:21:14
Speaker
Now, if an agency does want to expand or open up in one of those high regulation states, other than call you first, what's the first step from a legal standpoint? Make sure you you have an arbitration agreement incorporated it into your onboarding process of your temporary workers.
00:21:29
Speaker
That's so, so important across the country, whether it's in a highly regulated state or not. If it's not been reviewed in the last several years, have it reviewed once a year, right? That's really one of the only defense tools a staffing firm has available to it to try to minimize risk associated with class actions.
00:21:49
Speaker
And in those highly regulated states, class actions are more prevalent. So that's why we prioritize that arbitration agreement. And then secondarily is to conduct a review of the onboarding documents, so having to look at ah what you're having your folks fill out, sign, what does your handbook say?
00:22:08
Speaker
is your contract template okay? All those things, whether you're onboarding a client or you're onboarding talent, for that highly regulated state, have a look to see if anything needs to be modified.
00:22:20
Speaker
You want to make sure that if you're not allowed in that state to ask about criminal convictions, that your application doesn't include that question on the application. So as much as we want to try to make forms and process very uniform,
00:22:35
Speaker
Some firms just simply develop all of their content to the highest regulated state because then it complies with all 50. So eight you can go either way. Now, as regulations evolve, what resources should agencies use to stay compliant?
00:22:49
Speaker
Yeah, I think staying close to your lawyers and your professional advisors is really important. I think allowing staff to provide. be plugged into the industry and to industry trade groups is really critical. i think it's very easy for staffing firms and their teams to feel isolated in the bubble of their own organization.
00:23:13
Speaker
And we really get a lot of value from engaging with other people who are sitting in a similar position with us. And at a minimum, we know we're not alone.
00:23:25
Speaker
We, as a group and as an industry, there's a whole lot of things that we can do with people that maybe we compete with on the sales and the and the order fulfillment side. But when we're talking about legal compliance and legislation targeting the industry and things like that, we should be linking arm and arm to combat and and be informed on those issues. So really permitting that networking and that staying plugged into the industry piece to me is just so important.
Contract Negotiation and Risk Management
00:23:54
Speaker
I have a question about staffing agreements, staffing contracts. Back when I was in staffing many years ago, I'd walk in with my four page agreement, I'd get it signed and we'd start staffing for them.
00:24:05
Speaker
Except for the enterprise clients. A lot of times they'd have ah MSA where we had to sign their agreement. And I'm really starting to see that go down market into the SMB space.
00:24:18
Speaker
What should staffing agencies be looking at as landmines in these MSAs that these companies are having them sign? Isn't it interesting? I love those four page agreements. I always say a staffing agreement doesn't need to be more than four pages. It's not that hard.
00:24:32
Speaker
We get orders, we fill orders, we bill you, you pay us, right? So it's so easy peasy, right? But yeah, and it used to be the big Walmarts and Amazon of the world had their own customized staffing services agreements. And now it's definitely, i think,
00:24:47
Speaker
ah Most of my staffing firm clients are experiencing the same thing you're describing, Rob, that so many of them are handing them their contract and they're 20 plus pages long now. And it's really overwhelming for folks.
00:25:01
Speaker
In my experience with client drafted contracts, it's not always about what's in them, but it's about what's missing because they won't often include what their duties and responsibilities are.
00:25:15
Speaker
So they're not spelling out in their own agreement when they drafted on their paper that they're going to supervise your people or that they are directing the work or that they're providing a safe work environment. Now I've been pleasantly surprised a handful of times.
00:25:29
Speaker
I've actually seen some indies and clients using the ASA template, which is awesome. So it's really having kind of a list of what's important to the staffing firm around what do we expect for our clients to be doing? Let's make sure that's in their business terms. What's not in there that we want in there. We probably want some late fees.
00:25:47
Speaker
If they're not paying on time, we want 30 day payment terms, not 120 day payment terms, those kinds of things. And then, of course, I think I'd get kicked out of the lawyers club if I didn't mention, and if I didn't say indemnification, right? I mean, that's always the big one in terms of where the back and forth starts happening in a contract is when those client supplied contracts are trying to push so much financial responsibility to the staffing firm that you're almost then like an insurance policy. And so I typically advise firms that absolutely you indemnify for what you can control.
00:26:25
Speaker
If it's not within your control, it's really not reasonable for you to pay the tab on that one. And that's what indemnification is. It's just Who's going to pay for it when you know what hits the fan?
00:26:37
Speaker
And staffing firms can do things wrong if they don't conduct the screen that they committed to, if they breach the contract, right? All those things. Absolutely. you stand behind your commitments, but you likewise are expecting your clients to supervise properly, not allow hostile work environments.
00:26:52
Speaker
Those are things you can't take responsibility for. yeah As a salesperson, I've never wanted an agreement to stop me from getting a deal. right And there's a battle between leadership and sales in that oftentimes.
00:27:06
Speaker
What are your recommendations for people to keep deals moving along while minimizing risk in those situations? We could do a whole session on it. And I've done it before too. I mean, like the contract negotiation piece, the panels, those are always the best. And my biggest thing is that it feels awkward when you're negotiating a contract. Like this is usually a potential new client.
00:27:30
Speaker
It's like a prenup, right? Everybody's excited. You're about to have the wedding ceremony and you say, no way. We got to plan our breakup. If things go horribly awful, right? We would like a plan in place for that. So it's just, it's such a Debbie Downer because it just feels like you're planning for the end, but it is important. And what I try to counsel firms on to get these things to yes, is we're not looking for perfection and we don't want to overlawyer it. If you take that indemnification provision that the client drafted and you take the whole thing out and you put a whole new one in, yours goes to the bottom of the pile and all your competitors are getting the work.
00:28:06
Speaker
So really evaluating the opportunity against the risk and strategically plugging in some escape hatches for the staffing firm. And that might be other places in the contract. It might not be in the indemnification provision where it shines a spotlight on it, but somewhere else you might commit the client to provide a safe work environment and supervise.
00:28:28
Speaker
And not allow your people to drive. And then in the indemnity section, when you put in that they'll indemnify for their breach of contract, it doesn't look so bad, right? It's just a little tweak. It's not a complete rewrite. And so if you over lawyer the agreement, the deal is dead. With speed being the name of the game, it's really critical that you identify what are your top.
00:28:48
Speaker
issues and care about? What are the risks in this contract that maybe our insurance, which is our safety net, doesn't cover? And let's really focus on those. So what I'm hearing you say is there are ways to to make them win-win, even if they do seem kind of insurmountable at times by working things in other parts of the agreements.
00:29:08
Speaker
They are. And it can be a balance too, to make sure that the folks in the field are talking to the right person within the client company. Sometimes it can be hard to kind of escalate that, get that to someone with some authority.
00:29:20
Speaker
It can be great to solidify and deepen the bench in terms of your contacts within the client. If you can continue to move up that pole a little bit. I've had contracts that have come in that just looked, I think I saw one a few weeks ago.
00:29:33
Speaker
I opened it and it said it was like 72 pages long. And I just thought, I'm going to kick the can on this one until I'm in a better mood, right? This this is going to take, i need I need some real ability to focus on this.
00:29:47
Speaker
It was a low risk work comp code. It didn't involve driving, right? So you take into account all the factors that are coming into play. And it was a really reputable potential client. And so we're going to very surgically identify where tweaks need to be.
00:30:04
Speaker
I'm sure most staffing firms can count on one hand how many times they've had to sue a client not being related to collections. Staffing firms don't make it a habit to sue their clients under the contracts. Yeah. who's You're not going to sue anyway. What are you going to Put ah a bad mark on yourself and then nobody else wants to work with you because of that? That's it what...
00:30:23
Speaker
And I would say from personal experience, especially with agencies that maybe don't have a general counsel, is having somebody with that staffing
Role of Technology and AI in Staffing Compliance
00:30:31
Speaker
experience is huge. So my previous experience of staffing, I was in charge of looking through the contracts and I'd worked with multiple different lawyers, some that had no staffing experience. And those would be the ones that like to rewrite the whole agreement because they're not just, they just and have never been in the staffing industry. So yeah it was a blessing when I got to work with Leah because she knows not just the legal within a contract, but the business things too. What are the bad business decisions to accept within an agreement, right? They want 360 hour conversions. No, we're going to change that to 520. So it's nice being able to work with somebody that knows all of those things without you having to tell them.
00:31:06
Speaker
So but everything we were talking about, this all kind of falls under compliance. Are you seeing any staffing firms use any technology to help them stay compliant in these areas? Absolutely. And heavily relying on technology for that.
00:31:19
Speaker
The ATS systems, for example, that staffing firms rely on to run the day-to-day business is one of the most important pieces of tech. that they have in their stack to make sure that that's compliantly calculating something like overtime pay rates or the timing of pulling the hours correctly for the right work week period. All those kinds of things can be very, very important just even in the operational ATS systems that we're using day in and day out.
00:31:47
Speaker
And I just went to a conference a few weeks ago and heard one of the leaders at LinkedIn talking about AI, which is what everybody's talking about. And it's really clear that staffing firms who aren't committed to technology and continuous technology improvements are really going to be left behind.
00:32:08
Speaker
They're not going to be as quick. They're not going to be as reliable. They're not going to be as good at making the matches and optimizing the efficiencies. And so the companies that are wildly successful are the ones that are committed to incorporating tech anywhere and everywhere that they can help their teams do their jobs better.
00:32:28
Speaker
From a tech solution standpoint, as they are evaluating different tech, what should they be asking vendors before making a decision? Anything important? I always ask about data protection.
00:32:39
Speaker
What information are we going to be plugging into this platform? a lot of times it's very sensitive and confidential information, right? It could be If it's benefits related, there could be medical info, social security numbers, dates of birth, all that kind of stuff. So data protection, what is their parameters of that? How are they protecting that information? And are they willing to stand behind it?
00:33:00
Speaker
You know, their commitment to data protection, are they going to indemnify the staffing firm if they suffer a breach and they trigger a data violation on to our folks? And then the just the second one, which is really basic and isn't nearly as legally flashy, but the longer the demo period you could request, the better.
00:33:20
Speaker
And I only say that because most of the calls that I receive around vendor contracts is we signed a five-year contract, we're a year in and we don't like it anymore, or we never did and we haven't been using it.
00:33:33
Speaker
And especially right now, As staffing firms are kind of sharpening the pencils and trying to reduce optional spend, really making sure that someone is thinking about your tech stack and your tech solutions and making sure it's the right fit at the beginning and not just rolling the dice and saying, okay, here we go for five years with increasing rates and all that kind of thing. Just the certainty around the product itself before you commit to long terms.
00:34:03
Speaker
Yeah, sure. Yeah. Yeah, if there's an evergreen, make sure you're looking at that before it renews automatically. Yes, yes. Well, and you mentioned AI automation.
00:34:14
Speaker
And I think in the last five, seven years, I've seen the the staffing agencies, leaps and bounds, embrace tech more than they ever have it in the past. I think they're using it as differentiators. Are there any legal boogeymen that they need to be looking out for when it comes to AI and automation?
00:34:30
Speaker
If they're not thinking about it, Or if they don't think their people are using it, they need to be thinking about it, number one, and their people are all using it. I mean, that's just what's happening. The the younger generation is very tech savvy.
00:34:45
Speaker
They're going to do their work in a way that makes sense to them, which involves using technology. And so really important for staffing firms to have an AI policy system.
00:34:57
Speaker
ands sop They're in charge of of creating that roadmap for folks. So because we know they're using it, put some boundaries around that. And the opportunities are so great that you can't ignore them. And I really feel very strongly about equipping employees with as many tools to make them successful as possible. And AI is probably one of the number one tools that's currently available.
00:35:27
Speaker
But you do want to, like I said, set that roadmap and and those parameters, the bumper lanes down the bowling alley. And a lot of that involves confidentiality, making sure your folks understand what information is and is not appropriate to populate into an AI platform.
00:35:42
Speaker
It can also include what AI platforms are you comfortable with them utilizing? You know, there's new market players in that space every day. Yeah, great point. And then what vendors do you want to partner with? And there's a ton of opportunity there for vendors with the ability to engage with your applicants for sales, for content, for marketing.
00:36:03
Speaker
i mean, every which way we're seeing AI make a meaningful difference.
Final Advice from Leah Elliott
00:36:08
Speaker
Well, Leah, we appreciate all of the great legal insights you've given us today. And it's been an awesome conversation.
00:36:14
Speaker
Before we wrap up here, any final advice you want to give agencies trying to stay ahead of compliance issues? Stay curious, stay proactive. The more time that a firm spends curious about issues and optimization and solutions, and the more proactive they can be, the less time they're going to spend on that reactive stance, defending against claims and challenges and friction points. So staying proactive and curious and just really embracing that change management philosophy.
00:36:43
Speaker
And if somebody wants to work with you or learn more about Staffing GC, what's the best way to reach you? Oh, you can connect with me on LinkedIn, Leah Elliott, and happy to connect with anyone who's in the industry or or outside the industry to answer any questions anyone may have.
00:36:59
Speaker
Yeah, and i highly recommend. I've personally worked with Leah. Leah, thanks again for being here. It's always a pleasure. We appreciate your time and insights. And to our listeners, thank you for tuning into Staffing Made Simple, brought to you by Simple VMS, the most vendor-friendly VMS platform on the market.
00:37:15
Speaker
If you got value from this episode, make sure you like and subscribe. We'll be diving into more strategies, trends, and solutions to help you navigate the staffing world. And if you'd like to learn more about Simple VMS and how we support our end clients and agencies, visit our website at www.simplevms.com.
00:37:34
Speaker
Thanks everybody for listening. And we hope you join us next time on another episode of Staffing Made Simple. This has been an episode of Staffing Made Simple, powered by Simple VMS, the vendor-friendly VMS.