Who is liable when a ‘borrowed’ construction worker gets hurt?

As construction companies increasingly rely on subcontractors and temporary workers to meet project demands, the concept of “borrowed employees” has become central to workplace liability discussions.

This issue has only grown sharper in 2025. With labor shortages continuing and immigration status scrutiny making hiring more complex, many contractors are turning to subcontractors and staffing agencies to fill gaps. That reliance means a much higher percentage of temporary or “borrowed” employees on jobsites than in the past, and with that comes added liability risk.

A borrowed employee is someone who works for one employer but is temporarily lent to another, with consent. While working for the borrowing employer, that employer generally assumes responsibility. 

The complication comes when one of these workers is injured. Deciding who is liable depends on contract language, state law and above all, the actual control exercised over the employee. 

Assigning responsibility

Attorney Jerry Lehocky, founding partner of Pond Lehocky Giordano in Philadelphia, said the extent of liability depends on whether the injured worker is deemed a borrowed employee of the general contractor or remains an employee of the supplying business. That determination hinges on the amount of control the contractor has.

If there is insufficient control by the general contractor over the work performed by the employee, then the subcontractor or labor-supplying group remains the employer of that employee, he said. 

“If the borrowed employee is not an employee of the general contractor, then that general contractor could face exposure under a negligence action brought by the employee in addition to a workers’ compensation action against the subcontractor,” Lehocky said. “The amount of monetary exposure to the general contractor is multiples of what the workers’ compensation exposure is.”

Lehocky said that contracts may address some of these issues, but language is not controlling if the facts show otherwise.

“For example, the contract could state very specifically that the supplying employer remains the ‘employer’ for purposes of workers’ compensation; however, if the actual facts are that the general contractor is in actuality controlling the work performed by the employee, the contract language can be easily voided,” he said.

Maria Moffatt, an attorney with Gerstle Snelson in Dallas, noted that liability for the prime contractor depends on several factors: state statutes, contract terms, the parameters of the employment agreement and most importantly, the authority exercised on the jobsite.

“Therefore, the provisions of the contract as to supervision of workers, safety meetings and general control of the jobsite become very important,” she said. “And then if there are contracts or employment agreements governing the borrowed employee, those provisions have to be read in conjunction with the prime contract’s provisions.”

In general, though, an owner or general contractor is responsible for the safety of the workplace or jobsite for all workers on site and the contractor who is supervising, using or directing the work of the borrowed employee would most likely have responsibility for their safety unless contractually stated otherwise, she said.

Attorney Carol Sigmond, a partner at Greenspoon Marder in New York, pointed to the “borrowed employee doctrine,” which makes the borrower liable.

“Sometimes, the employee is deemed a ‘special employee,’ which is a matter of state law, so the rules will vary from state to state somewhat,” she said. “This is often used to shift liability to a basically judgment-proof single-purpose entity away from the ‘real’ company for financial reasons.”

For that reason, when this doctrine is invoked to protect the real employer, courts will look at the degree of control the lending employer has over the borrower, she said. They will also look at the oversight by the lending employer, the relationship between the borrower and the lender, decision making by the lending employer, who is actually controlling the work site and the borrowed employee. 

Important contract provisions

Contractors should require their subs to disclose if borrowed employees are used. Moffatt said contracts should clearly state who is responsible for oversight, payroll, wage determination, insurance or workers’ compensation, employee status, provision of tools and materials and scope of work.

“The best practice is to include a provision that outlines the responsibilities of the company that is the owner or general contractor — who is in charge by contract of the construction site — and the company that supplies the labor or workers,” she said.

Matthew Koskinen, a construction attorney at Dickinson Wright in Fort Lauderdale, Florida, said that in states such as Florida, courts presume general employment. Contractors must rebut that presumption and show that the borrowed employee relationship exists.

“Factors that the courts utilize in determining whether this relationship exists revolve around the existence of a contract, the work being performed at the time of injury being that of the special employer, along with the special employer’s control over the borrowed employee’s work,” he said. “Accordingly, having an agreement in place that touches upon each of these elements is critical and agreements can and should be executed at each layer for optimal protection.”

He added that provisions addressing insurance coverage and limits, proof of coverage, remedies if coverage is cancelled and indemnity obligations are also key.

Attorney Adam Richards, also with Dickinson Wright, said that whenever analyzing liability in connection with construction site injuries, the starting and ending point is often workers’ compensation coverage. 

“Throughout the country, an employer is typically immune from liability in exchange for providing such insurance coverage, unless an exception applies, such as intentional misconduct or gross negligence,” he said. “Therefore, if and when dealing with borrowed employees on a jobsite, it is first critical for the general or prime contractor to ensure that workers’ compensation coverage is indeed being provided by the initial employer or the borrowing employer/subcontractor, and if not, that the contractor has adequate coverage that would cover those borrowed employees in the absence of any other coverage downstream.”

In all cases, contractors must be able to show that the borrowed employee relationship exists in order to claim immunity under state workers’ compensation laws.

“A contractor should always consult with an attorney first if they are going to be using workers or employees that belong to another employer or contractor,” Moffatt said.

Borrowed employees help fill vital gaps on construction projects, but they create layers of liability that can be costly if left unaddressed. Contracts, insurance coverage and a realistic look at who is actually directing the work are what determine responsibility. 

For general contractors, the safest approach is transparency, strong agreements and early legal guidance before workers ever step on site