How helpful is having an indemnification arrangement concerning contingent workers?

If a company is found to be an employer or joint employer of a worker, that company may be sued by the worker, irrespective of any contract the employer or joint employer may have with a third party such as a staffing company. Although an employer or joint employer generally cannot delegate to a third party primary legal responsibility under most employment laws, such employers frequently can create a contractual right of indemnification with a third party.

Under such arrangements, if an employer or joint employer is sued and is found liable for damages, the third party would be contractually obligated to reimburse the employer for the entire judgment rendered against it.

Remember that an indemnification arrangement does not prevent the employer from being sued. It only gives the employer a contractual claim against the third party if the employer is sued and loses.