A temporary staffing agency can terminate a worker’s assignment or employment relationship. This is generally permissible because most U.S. employment operates under a legal doctrine allowing employers and employees to end the relationship at any time. A worker placed by an agency is subject to this rule, though the dual nature of their employment introduces unique complexities. Understanding who is responsible for the termination and the specific reasons provided helps the worker determine their legal standing.
Understanding the Dual Employment Relationship
Temporary workers operate within a dual employment relationship, meaning two entities act as employers: the staffing agency and the client company where the work is performed. The staffing agency functions as the Employer of Record, managing administrative duties like payroll, tax withholding, and benefits. This agency formally hires the worker and maintains the overall employment relationship.
The client company acts as the Supervising Employer, directing day-to-day tasks, setting schedules, and overseeing worksite performance. Both entities can be considered joint employers under federal law due to this shared control. While the client company cannot formally “fire” the worker, it can request that the staffing agency remove the worker from the assignment.
The At-Will Standard for Temporary Workers
The legal doctrine of at-will employment governs most private-sector working relationships across the country. This principle dictates that an employer can terminate an employee at any time, for almost any reason, as long as the reason is not illegal. Temporary workers are subject to this standard, meaning the staffing agency does not need to provide notice or have formal “just cause” to end the employment.
This standard applies equally to the worker, who is free to leave an assignment or quit the agency at any time. The at-will nature allows the client company to request the worker’s removal from the job site immediately. While this ends the assignment, the ultimate decision to terminate the worker’s employment or place them on a new assignment rests with the staffing firm.
Common Reasons for Termination
Termination reasons are often practical and operational, stemming from the client company’s needs or the worker’s conduct.
Performance and Conduct
Poor performance is a frequent cause, including failing to meet production quotas, making repeated errors, or lacking necessary skills. Client companies seek immediate productivity and may quickly request a replacement if expectations are not met. Attendance and punctuality issues, such as chronic tardiness or unauthorized absences, also lead to removal.
Inconsistent attendance disrupts operations, as client companies rely on temporary workers to fill immediate gaps. Serious workplace misconduct, including insubordination, violating safety protocols, or harassment, will result in immediate termination from an assignment.
Business Needs
Sometimes termination is not the worker’s fault but results from a change in the client company’s business needs. Examples include a project completing ahead of schedule or a sudden reduction in workload. In these cases, the assignment ends early, often classified by the agency as a reduction in force or lack of work. In all situations, the client company reports the issue to the staffing agency, which makes the final decision on whether to terminate the worker entirely or attempt a new placement.
When Termination is Illegal
Despite the broad allowance of at-will employment, federal and state laws protect employees from unlawful termination. When a temporary worker is fired for a reason that violates these specific protections, it constitutes wrongful termination. These exceptions generally involve discrimination, retaliation, or a breach of an existing employment contract.
Discrimination Based on Protected Characteristics
Federal anti-discrimination laws, including Title VII of the Civil Rights Act, the ADA, and the ADEA, protect temporary workers just as they protect permanent employees. An agency or client company cannot terminate a worker based on characteristics like race, color, religion, sex, national origin, age (if 40 or older), or disability. State and local laws often expand these protections to include sexual orientation or gender identity.
If a worker can demonstrate that a protected characteristic motivated the termination decision, they may have a claim of illegal discrimination. Both the staffing agency and the client company can potentially be held liable for discriminatory actions due to the dual employment structure.
Retaliation for Protected Activities
Workers are legally protected from being fired in retaliation for exercising certain rights, even in an at-will environment. Protected activities include filing a workers’ compensation claim, reporting safety violations to OSHA, or whistleblowing on illegal employer activities. Opposing discrimination or participating in a related investigation is also protected.
An employer cannot terminate a temporary worker simply because they filed a complaint or reported a violation. To establish a claim, the worker must show a connection between the protected activity and the adverse employment action, such as the termination occurring shortly afterward.
Breach of Contract
Although most temporary employment is at-will, termination is illegal if it violates the terms of an express or implied contract. An express contract is a written agreement that limits the employer’s right to fire, often by requiring “just cause” or guaranteeing employment for a specific duration. This is rare in temporary staffing but possible for high-level contract positions or union agreements.
An implied contract can be created through consistent promises made by the staffing agency or client company. For example, a statement in an employee handbook guaranteeing a progressive disciplinary process before termination may create an implied contract. If the agency fails to follow its own written policies or assurances, the worker might claim the termination constitutes a breach of contract, overriding the at-will standard.
What Happens After Termination
After termination, several logistical and financial consequences must be addressed. State laws govern the timing of a final paycheck, requiring all earned wages, commissions, and accrued vacation time to be paid quickly.
A terminated temporary worker may be eligible for unemployment benefits if they lost their job through no fault of their own. If the assignment ended because the project was completed or the client requested removal for a non-willful reason like low performance, the worker is typically eligible. However, if the termination was for willful misconduct—such as theft, insubordination, or gross attendance violations—eligibility may be denied.
The worker must file the claim against the staffing agency, which is the Employer of Record responsible for unemployment insurance taxes. If the assignment ended due to lack of work, the agency will likely search for a new placement; if the worker was terminated for serious misconduct, the agency may end the employment relationship entirely.