Many companies seek the benefits of using temporary employees. It is a convenient as well as an economical way to meet last minute deadlines and short-term staffing crunches.
Making use of temporary employees provides employers with flexibility, reduces their long-term investment in individual employees, and gives them the option of reducing staff size without affecting the rolls of their permanent employees.
Employers now using long-term temporary staff
In recent years the placement of temporary employees has taken on a new look. Now, companies are often placing temporary employees in long-term positions, making them indistinguishable from regular employees – except for the fact that they’re not receiving benefits (e.g., paid vacation time, group health coverage under temporary worker insurance plans).
General commercial liability policies cover the acts of employees within the scope of their employment. However, it has become common for companies and firms to occasionally procure the services of skilled temporary workers, for example, administrators, paralegals, legal secretaries, etc., that are provided under a contract with an agency. Some are purely temp staff members and therefore are not “employees” of the company they’re working for.
On the other hand, companies are finding themselves at risk for being sued by their long-term temps – both for the employee benefits they’re not receiving as well as work-related injuries. Traditionally, the company accepting temp employees has been called the “client company, “ and the company placing them, the “leasing company.”
Can the client company still treat long-term temp workers as independent contractors, or do they become permanent employees? Another critical question for client companies is are they exercising day-to-day control over long-term temps, which may legally mean extending to this class of workers whatever benefits are being offered to permanent employees?
It is fairly easy for a client company to include temporary workers insurance in its workers compensation policy. The names and relevant data of the temps are submitted to the insurer as extra persons affecting payroll and the risk modification rating. It is easy to classify these individuals as additional employees in the general type of work done by the client company. Whoever procures the workers compensation coverage can have significant consequences for who has protection from being sued when a temporary employee is injured on the job.