Observers believe that the recent upswing of hiring temporary workers is a reflection of our improving economy. While a staffing agency pays a temporary worker for their services, employers remain obligated to comply with state and federal employment laws, including workers comp and discrimination statutes.
As the use of temporary workers increases, employers need to guard against certain liabilities related to the use of such workers, which is where staffing insurance comes into play. Attorneys will tell you that temporary workers hired through staffing agencies are considered to be an employee of both the agency and client company, even though the agency pays the salary for the work being performed.
Temps have same rights as employees
Employers need to realize that when they hire temporary employees through temp agencies they’re potentially exposing themselves to most of the same concerns and risks that are involved in directly hiring employees. As long as you control those employees and you require them to adhere to company polices (and they are directly supervised by the firm) they can be found essentially to be your employee under various employment laws.
There are agreements in place that dictate that the individual worker remains the legal employee of the temporary agency, and the temporary agency is legally bound to pay their wages and their workers compensation insurance, but when it comes to employment, discrimination and sexual harassment claims, certain laws protect workers even though they’re not technically employed by the employer of record.
Whether workers are brought in by a staffing agency or are the result of direct hire, many in the industry will tell you that employers need to be concerned about many of the current employment laws and benefits associated with being an employee. Failing to clearly define what is considered temporary employment may result in your running a real risk that one of those contingent workers could claim they were entitled to benefits under that employer’s plan.
Using an agency to hire temporary workers helps to mitigate some of the potential risk of someone seeking reclassification as an employee. The temp agency needs staffing insurance for both full time employees and the temp workers they send out on assignment for some of the same reasons.