Staffing agencies are pivotal in providing skilled temporary healthcare workers to meet the fluctuating demands of healthcare facilities. However, this responsibility comes with significant obligations within their Employment Practices Liability (EPL). Agencies are required to sign contracts that obligate them to defend and indemnify their clients against EPL claims arising from their employees.
To effectively manage these risks, agencies must implement robust risk management strategies and ensure appropriate insurance coverage. EPL include discrimination, harassment, wrongful termination, and retaliation, all of which can lead to financial liabilities for legal costs and settlements related to claims made by the agency’s employees against the client.
Key EPL risks for staffing agencies
1. Discrimination and harassment claims: Temporary healthcare workers may feel less empowered to report discrimination or harassment, increasing the risk of claims. To mitigate this risk, agencies should:
- Develop and enforce anti-discrimination and harassment policies tailored for that temporary healthcare workers.
- Provide comprehensive training to all temporary workers on their rights and reporting procedures before placement.
2. Wrongful termination and retaliation: In the fast-paced healthcare environment, temporary workers might face wrongful termination or retaliation claims, especially if they raise concerns about patient care or working conditions. Staffing agencies must:
- Maintain detailed documentation for all stages of the employment process, including hiring, performance evaluation, and termination.
- Ensure that healthcare facilities have clear policies for managing temporary workers that align with employment law.
Best practices for mitigating EPL risks
1. Vetting healthcare clients: Before signing contracts with healthcare facilities, staffing agencies should thoroughly vet potential clients by reviewing their facility’s employment practices, track record with temporary workers, and commitment to providing a safe and respectful work environment to ensure that the facility’s practices align with your agency’s standards. Steps to consider:
- Conducting regularly audits of healthcare facilities’ treatment of temporary workers and ensure their practices align with your agency’s standards.
- Carefully reviewing client agreements for indemnification clauses and exposure risks.
2. Securing adequate insurance coverage: Agencies must secure appropriate Employment Practices Liability Insurance (EPLI) with a client coverage endorsement to provide coverage for claims made against the healthcare facility that the staffing agency has agreed to indemnify. Key insurance considerations include:
- Ensuring your EPLI policy covers indemnity obligations related to your clients.
- Reviewing that coverage limits are sufficient to cover potential claims, including defense costs and settlements.
3. Strengthening contracts with healthcare facilities: Contracts with healthcare facilities are a critical tool for managing EPL risks. These contracts should clearly outline the responsibilities of both parties, including compliance with employment laws and providing a safe working environment. Important clauses to include are:
- Indemnification clauses that limit agency exposure and ensure that the indemnity is reciprocal or includes exceptions where the healthcare facility’s actions contributed to the claim.
- Compliance obligations mandating that the facility complies with all relevant healthcare, employment regulations, maintains adequate EPL insurance.
4. Monitoring and support: Ongoing monitoring and support for temporary workers are essential. Staffing agencies should establish regular check-ins with their workers to address any concerns and ensure they are treated fairly in their placements. Support strategies include:
- Collecting regular feedback from temporary workers about their experiences and addressing any issues promptly.
- Providing anonymous reporting mechanisms for temporary workers to safely report any issues they encounter.
By thoroughly vetting healthcare clients, securing comprehensive insurance coverage with specific client endorsements, strengthening contracts, and offering ongoing support to temporary workers, staffing agencies can mitigate EPL risks. These strategies are essential to safeguarding your business and ensuring a positive experience for the workers you place, while also contributing to a safer and more equitable working environment in the healthcare sector.
For more information, visit our healthcare staffing toolkit or contact a Marsh McLennan Agency (MMA) advisor.
