The workers provided to companies by temporary staffing agencies are employees of the agencies and not the companies to which they have been temporarily contracted. Therefore, agencies are responsible for ensuring that these workers are provided with the necessary level of workers’ compensation insurance. This can be a complicated process as these agencies often provide workers to companies in a variety of industries. However, there are steps they can take to make sure that they are providing appropriate levels of coverage to their employees and to reduce the amount paid for this coverage
Keep Meticulous Records of Hours and Pay
The premiums of workers’ compensation insurance for staffing agencies are partly based on payroll numbers. Thus, agencies need to be precise when logging the hours their employees work with client companies and the number of payments received for this work.
Use the Correct Risk Classification Codes
In addition to payroll, workers’ comp premiums are calculated in reference to the level of risk to which workers are exposed while performing their jobs. In order to pay accurate premiums, staffing agencies must have a complete understanding of the work that will be carried out by their employees and apply the corresponding NCCI risk classification code for this work.
Vet Potential Clients
Finally, before taking on a new client, agencies should verify that the company strictly follows OSHA protocols and provides staff with the appropriate safety training.
Ensuring that employees have workers’ compensation insurance is important. It protects not only the employees but also their employers. An insurance expert can further assist staffing agencies in determining correct premiums and adequate coverage levels.