Your Rights as a Staffing Agency Worker:

If you work for one company but get your paycheck from another, your wage rights can get complicated. Who is responsible when something goes wrong? Can both companies be held accountable? Federal law gives you the same protections as direct employees, but enforcement often requires knowing which company violated your rights.

How Staffing Arrangements Work and Where Problems Start

In a typical staffing arrangement, you are placed at a client company like a bank, tech firm, or consulting company. You work under their direction. You follow their schedule. You use their equipment. But your paycheck comes from the staffing agency.

This structure creates confusion about who owes you what. The staffing firm may say the client sets your hours. The client may say the staffing firm handles pay. When a wage violation happens, both may point at each other.

Federal wage law does not allow this dodge. The Fair Labor Standards Act uses a concept called joint employment. If both companies benefit from your work and have control over your job conditions, both can be your employer. That means both can be liable for unpaid wages.

Joint Employment: When Two Companies Are Responsible

The Department of Labor published a final rule on joint employment in January 2020. It lays out when multiple companies share responsibility for a worker.

Courts look at these factors to decide if joint employment exists:

• Does the client company control your schedule or supervise your work?
• Does the client company determine your rate of pay, even indirectly?
• Does the client company maintain your employment records?
• Does the staffing firm have the right to hire, fire, or discipline you?
• Is there an agreement between the two companies about your placement?

If the answer to several of these is yes, you likely have two employers. This matters because it means you can pursue wage claims against both companies, not just the one that signs your check.

Common Wage Violations in Staffing Situations

Staffing workers often experience specific types of wage problems. These patterns repeat across industries and staffing firms.

Unpaid Overtime

You are entitled to overtime pay at one and a half times your regular rate for any hours over 40 in a workweek. This applies even if you are paid through a staffing agency. Some staffing firms misclassify workers as exempt to avoid paying overtime. Others simply fail to track hours correctly.

If you work more than 40 hours and receive straight time or no pay for those hours, that is a violation. It does not matter what your contract says.

Misclassification as Independent Contractor

Some staffing firms classify workers as independent contractors and issue 1099 forms instead of W-2s. This is often wrong. If the staffing firm or client company controls when, where, and how you work, you are likely an employee, not a contractor.

Misclassification means you lose overtime protections, unemployment benefits, and workers’ compensation coverage. It also shifts tax burden to you. Courts take this seriously and apply an economic reality test that looks beyond what your contract calls you.

Unpaid Hours and Off-the-Clock Work

Staffing workers sometimes perform work that is not recorded. This includes time spent waiting for assignments, training that the client requires, or work performed before clocking in. All compensable time must be paid, even if it was not formally authorized.

Illegal Deductions

Some staffing firms make deductions that bring your pay below minimum wage. Common examples include charges for uniforms, background checks, drug tests, or equipment. These deductions are illegal if they reduce your pay below the federal or state minimum wage.

What Your Contract Cannot Take Away

Staffing agreements often include language that tries to limit your rights. These provisions are not enforceable if they conflict with federal wage law.

You cannot waive your right to overtime. You cannot agree to work off the clock. You cannot accept less than minimum wage. You cannot legally sign away your federal wage rights!

Some contracts include arbitration clauses or class action waivers. These may be enforceable depending on how they are written and what state you work in, but they do not eliminate your underlying wage rights. They only change where and how you pursue those rights.

Who Can Be Held Liable

In a staffing situation, liability can extend to multiple parties. The FLSA defines employer broadly. It includes any person acting directly or indirectly in the interest of an employer in relation to an employee.

This means:

• The staffing agency that hired you
• The client company where you performed work
• Individual owners or managers who had operational control
• Parent companies if they exercised control over pay decisions

Recent case law has reinforced that individual managers and supervisors can be personally liable for wage violations, even if they do not own the company. This is especially relevant in staffing cases where the client company’s managers direct day-to-day work but claim they are not the employer.

Records You Should Keep

Staffing workers should keep their own records. Do not rely on the staffing firm or client company to have accurate records when a dispute arises.

Keep copies of:

• Your placement agreement or contract with the staffing firm
• All pay stubs
• Timesheets or time tracking records
• Any emails or messages about your hours, pay rate, or job duties
• Proof of hours worked, including calendar entries or personal logs
• Any communications about overtime, deductions, or classification

If the staffing firm or client company does not provide accurate records, you can use your own records as evidence. Courts understand that workers in these arrangements often do not have access to complete employer records.

What to Do If You Believe You Were Not Paid Correctly

Write down the facts. Start with when you started working, who placed you, where you worked, how many hours you worked each week, what you were paid, and what you believe you should have been paid. Be specific.

Gather your records. Pull your pay stubs, contracts, and any communications about pay or hours. If you do not have complete records, write down what you remember.

Understand the deadlines. The FLSA generally allows two years to file a wage claim. If the violation was willful, you may have three years. State laws may provide longer deadlines. Every month that passes makes it harder to recover what you are owed.

Consider speaking with a wage and hour attorney. Many wage cases are handled on contingency, meaning you do not pay unless you recover. An attorney can tell you whether you have claims against the staffing firm, the client company, or both, and what those claims may be worth.

State Law May Provide Additional Protections

Federal law sets a floor. State wage laws often go further. Some states have higher minimum wages, stricter overtime rules, or longer deadlines to file claims.

Texas follows the federal minimum wage and overtime rules but allows claims to be filed under state law as well. California, New York, and Illinois have much stronger wage protections for workers. If you worked in multiple states, you may have claims under the laws of each state where you performed work.

Some states also have specific staffing agency regulations. These can include bonding requirements, notice requirements, and prohibitions on certain contract terms. If your staffing firm violated state-specific rules, that may give you additional claims.

You Have the Same Rights as Direct Employees

Being placed through a staffing agency does not reduce your wage protections. The FLSA applies to you the same way it applies to workers hired directly by the company where you work.

If you worked the hours, you are entitled to be paid for them. If you were misclassified to avoid overtime, that is illegal. If deductions brought you below minimum wage, you have a claim. The complexity of the staffing arrangement does not erase these rights.

Staffing firms and client companies sometimes use that complexity to avoid responsibility. The law does not allow it. If you were not paid correctly, both companies may owe you.