A recent EEOC Press Release caught my attention and serves as a useful reminder of a basic employment law principle that too many employers forget: you can outsource administration, but you cannot outsource liability.

According to the EEOC, Butterball referred an employee who needed intermittent leave for breast-cancer treatment to its third-party benefits administrator. Unfortunately, somewhere along the line thereafter, the ball was dropped, and the leave for this employee was never approved. The employee subsequently accumulated attendance points for unapproved absences, and the company fired her under its attendance policy. In bringing the lawsuit against the employer, the EEOC’s message was blunt and succinct: “Even when an employer hires a third-party benefits administrator, the employer remains responsible for complying with anti-discrimination law.”

So too does an employer remain responsible for complying with any employment law, regardless of its outsourcing compliance functions. Common situations in which this can arise:

• If your company uses an employee handbook provided by a benefits administrator that contains illegal provisions (e.g., under state law or the National Labor Relations Act)
• Failure to pay overtime wages because of a payroll administrator’s oversight or error
• Automation of FMLA processes where employers can be liable for not providing the grace period(s) contemplated by that law’s regulations
• As in the case of Butterball, relying on a benefits administrator to track absences without engaging with the employee in the interactive process required under the Americans with Disabilities Act (ADA)

I am not naïve. There is nothing inherently wrong with using vendors for leave administration, benefits, payroll, and timekeeping. However, problems arise when employers (i) treat those vendors like their favorite slow cooker recipe (don’t just “set it and forget it”) and/or (ii) treat their vendor(s) as a substitute for legal counsel. While your third-party administrators can process the paperwork, your hand should remain firmly on the steering wheel, as the ultimate liability will not be coming out of their pockets.