February 26, 2020Published Article

Rumbaugh authored article, "Term limits: Misunderstood role in co-employment"

Contingent Workforce Strategies

An employment attorney and co-employment expert reprises his argument that the strategy is flawed.

In 2009, I wrote an article for Contingent Workforce Strategies magazine called “It’s Not a Matter of Time” about the use of term limits as a risk management tool. In the 10 years since, there continues to be a dizzying array of questions and discussions regarding term limits and their effectiveness in addressing co-employment issues.

Given this odd industry fixation on term limits, Staffing Industry Analysts has asked for an update to the original It’s not a Matter of Time article, addressing some of the questions, comments and myths that continue in this area.

To restate one of the themes of the original article: There is nothing wrong with having a term limit. Term limits have legitimate business uses. They just don’t have much to do with co-employment in most cases.

Employee Status

While there are dozens of tests for employee status, the most commonly cited test comes from the United States Supreme Court case of Nationwide Insurance v. Darden. The Darden test (also called the “common law” test) sets forth 13 factors for determining employee status. Many readers are intimately familiar with these elements of the most famous and well-known test for employee status. Even strangers to the field of contingent labor, however, are likely at least somewhat familiar with the Darden common law test. The elements of the test are:

  1. The hiring party’s right to control the manner and means by which the product is accomplished;
  2. The skill required;
  3. The source of the instrumentalities and tools;
  4. The location of the work;
  5. The duration of the relationship between the parties;
  6. Whether the hiring party has the right to assign additional projects to the hired party;
  7. The extent of the hired party’s discretion over when and how long to work;
  8. The method of payment;
  9. The hired party’s role in hiring and paying assistants;
  10. Whether the work is part of the regular business of the hiring party;
  11. Whether the hiring party is in business;
  12. The provision of employee benefits; and
  13. The tax treatment of the hired party.

To read the full article, click here.

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