Alabama Workers' Compensation Eligibility

• Under the Alabama Workers' Compensation Law, eligibility for workers' compensation benefits in the case of on-the-job injury or illness caused by working conditions pertains only to employers with at least five employees. The law applies only to permanent employees, not temporary workers. In Alabama, leased employees generally qualify for workers' compensation coverage under the policy of the company leasing them. Employers may purchase workers' compensation insurance or may be eligible to self-insure. Employees do not pay for workers' compensation insurance. Injured employees accepting workers' compensation medical and other benefits usually give up the right to sue the employer. Any employer required to provide workers' compensation insurance who does not do so is open to liability if an injured worker sues.
  
  

Employee Leasing

• According to the Alabama Department of Industrial Relations, which oversee workers' compensation in the state, "Employee leasing is not an alternative to workers' compensation but rather an employment alternative." It describes employee leasing as an arrangement in which the employer contracts with company leasing employees to provide services. Generally, the employer transfers the employees to the leasing company and then leases the same employees back from the company. The employer then pays the leasing company all of the employee wages, benefits and withholds necessary taxes. On its part, the leasing company separates any payroll withholding and makes the payments, as well as actually paying the employees' salaries and wages. The major benefit for the employer is cost savings for group health insurance, as the leasing company can offer larger group insurance rates due to its large number of people it technically employs.
  
  

Leasing Company Legitimacy

• The Alabama Department of Industrial Relations warns that although most employee leasing companies are legitimate, some may not be. It is up to the Alabama employer to conduct due diligence to ensure that the leasing company it deals with is operating under full legal compliance. Any employer contracting with a leasing company operating illegally faces the same risk as if it did not carry workers' compensation coverage. The department advises that any such contracts should be submitted to the employer's attorney before signing.
  
  

Occupational Health and Safety Act

• According to a 2002 article in the Alabama Employment Law Letter, the question of who is responsible for OSHA compliance involving leased or temporary employees comes down to shared responsibility between the employment agency and the client employer. "The primary responsibility will rest with the client employer that creates and controls working conditions at its workplace," according to the AELL. There is no exemption from any training requirements due to the temporary nature of an assignment, especially any safety precaution training.