A recent Massachusetts decision closed a loophole that allowed staffing-firm employees injured at a client company both to collect workers’ compensation benefits and to sue the company where they were hurt.
The Superior Court in Massachusetts held that by an alternate employer endorsement naming a staffing company’s client as insured under their workers’ compensation policy, the client company is entitled to the same protection as the staffing company under the Workers’ Compensation Act.
Since 1911, Massachusetts employers have been required to carry workers’ compensation insurance to cover their employees, or to qualify as self-insured under the Workers’ Compensation Act. An employee injured while working is almost always entitled to monetary benefits, medical care, and rehabilitative services, regardless of fault or negligence. In return, employers are generally not subject to civil liability or lawsuit by the injured workers or their families.
Staffing agencies are a growing industry, where they lease employees to their clients to perform work that is part of the client’s business. Effective use of temporary workers helps the ninety percent of U.S. companies that use staffing agencies alter work staff as production needs fluctuate without incurring excess costs.
Based on previous procedures, an injured employee of a staffing company would have the right to sue the client company for common law damages and collect workers’ compensation from the staffing agency, but an injured employee of the client company doing the same work would only be entitled to workers’ compensation benefits. Until now, no Massachusetts court has addressed whether client companies of staffing agencies are protected under the Workers’ Compensation Act.
In Molina v. State Garden, Inc., the Superior Court held that the client company after alternate employer endorsements receives the same immunities as the staffing company under the Workers’ Compensation Act. This decision demonstrates the importance of staffing agencies to obtain alternate employer endorsements that specify the name of clients as additionally insured.
Pulgini & Norton, LLP attorneys have handled workers’ compensation claims for over 25 years in and around Boston and its surrounding areas. If you or a family member has been injured at work and would like to seek legal assistance, please contact us at (781) 843-2200 or (888) 344-2046 or email us.
Court Closes Workers Compensation Loophole For Staffing Companies, mondaq, May 1, 2013