How Pregnancy-related Employment Law Applies to Contractual Labor

Imagine that you are in the middle of leading a major change management initiative, and a critical external consultant whom you hired has shared that they are pregnant and will need three months off very soon. They’ve been working with you for 9 months thus far and are expected to stay on the engagement for at least another year.

Now for the critical question – Are you required to provide any ongoing work guarantees or accommodations to your pregnant contractor?

While the first answer that pops into your mind may be “no,” I must caution you that the true answer is not as clear as it may seem.

The Family Medical Leave Act of 1993 (FMLA) and its precursor, the Pregnancy Discrimination Act of 1978, were both enacted to ensure working women and their families did not face discrimination as a result of a pregnancy.

• The FMLA provides up to 12 weeks of unpaid leave to mothers or fathers to take care of delivery and infant care and makes it illegal to terminate someone for their pregnancy.
• The PDA stipulates that employers treat pregnant and non-pregnant people the same with respect to all rules, including benefits.

When the pregnant worker is a contractor, the letter of the law can become a bit blurred. Here’s what your organization needs to know about pregnancy labor laws and blind spots to avoid while utilizing members of an external workforce:

Blindspot #1:  Ambiguity of Pregnancy Labor Laws for Contractors

To give you some perspective on the ambiguity of pregnancy labor laws for contract and contingent laborers, check out this case study (names changed to protect true identities):

“Tabitha was a contract consultant assigned to The Widget Company by Experts-R-Us, a staffing firm that supplies strategic expert consultants.

Tabitha began her assignment in June 2022, and in August 2023 went on maternity leave upon going into labor. The Widget Company terminated her assignment three days later and found a replacement worker on its own.

The district court found no evidence that The Widget Company “acted with a discriminatory animus by terminating Tabitha’s assignment,” dismissing Tabitha’s claims of pregnancy discrimination.”

On appeal, the court found that only the primary employer, Experts-R-Us, was responsible for compliance with leave according to the FMLA. Yet, the court ruled that the secondary employer (The Widget Company) did bear a conditional burden.

The secondary employer was obligated to accept a returning FMLA employee, provided they continued to engage the same staffing firm to fill that position. Since the secondary employer replaced Tabitha without using Experts-R-Us to fill the position, neither entity broke its  FMLA obligations.

Cases like Tabitha’s sound pretty tricky, don’t they?

Blindspot #2:  Accurately Complying With Pregnancy Labor Laws

Contract workers sourced via staffing companies are covered under the anti-discrimination statutes because, in the eyes of the law, they qualify as “employees” of the staffing firm. The staffing firm bears responsibility for the following:

• Recruiting, screening, testing, and hiring workers
• Payroll expenses and paperwork
• Unemployment and workers’ compensation insurance
• Payroll and withholding taxes
• Any additional employee benefits they may opt to offer.

Consequently, staffing firms and their clients (secondary employers) may not discriminate against the workers on the basis of race, color, religion, sex, national origin, age, or disability—including pregnancy. Still, there are significant differences to consider.

Blindspot #3: Lack of Knowledge of Differences and Considerations

The FMLA says individuals must have worked for an employer for at least 1 year before being eligible for protection under the law.  As most contract assignments are short-term, this often makes the point moot.

The Pregnancy Discrimination Act does not mandate that companies offer healthcare and other benefits; it simply requires that employers make benefits given to any employees available to all. Again, since many staffing suppliers offer minimal-to-no benefits, the law here is again moot.

As is the case with many contractor arrangements, the contract specifies the length of the engagement. In cases where the contractor becomes pregnant before the contract is fully concluded, the employer can legally terminate the contract for failure to meet the conditions of the agreement. This, again, renders the law irrelevant.

Solution:  Navigating the Complexity

Understanding how the nuances of Blended Workforces, such as labor laws, apply to all types of talent pools is critical to both your bottom line and level of legal risk.  Me and my team at Shockingly Different Leadership are happy to help advise you on how to best make blended workforces work in your business model or industry.