The Illinois Worker’s Compensation Act provides, under section 1(a)4, that employers may borrow or loan employees.  Most of the companies that engage in this practice operate as staffing companies, or temp services.  Some are labor companies, where employees are hired for daily work at different locations.  These positions can be temporary, semi-permanent, or ultimately result in permanent employment.

These loaning and borrowing employers are jointly and severally responsible for the workers’ compensation benefits to an injury sustained by an injured worker.  “Jointly and severally” means that they are either together or individually responsible.  Put more succinctly, a borrowing employer will control the employee in terms of when and where he works for that borrowing employer, and usually payroll is done by the staffing or temporary agency, who provides the actual insurance to cover injured workers.  However, if the loaner does not pay, the borrower will be responsible.  Both are considered employers, and each are jointly and individually liable for workers’ benefits.  While workers’ compensation claims are a legal course of action against both employers in this situation, it should be noted that, as always, Section 5 of the Illinois Workers’ Compensation Act bars lawsuits by injured workers against either the borrowing or loaning employer.  An injured worker is not permitted to sue his or her employer or a co-worker except under very limited circumstances.  Many people fail to realize that filing a workers’ compensation claim is not a lawsuit against an individual’s employer, but rather, an application for benefits under the Illinois Workers’ Compensation Act.

Illinois Workers’ Compensation Act, Loaning & Borrowing Employers, Temp / Staffing Agency

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