Temps Can Cost You More Than You Think


When a business has need for someone to help clear a temporary work backlog, cover for a permanent employee on vacation or leave, or handle a sudden influx of orders, they often turn to temporary or contengent workers, often called “temps” for short.

Temps can solve a lot of business problems while still allowing for staffing flexibility that might not be possible with permanent hires. But temporary staffing isn’t all rainbows, glitter and unicorns. Here are a couple of things to keep in mind if you want to prevent your temps from becoming your most expensive workers:

You are probably still an employer

Sometimes, companies bring temps on board because they think this will potentially insulate them against employment law claims, such as wage and hour disputes. They assume the temp is an employee of their agency (because the agency is the one who cuts the worker’s paycheck), and the agency will bear all the potential liability.

In fact, some agencies even advertise this as a benefit of hiring temps.

However, as I noted previously the law recognizes a concept called “joint employment.” This means, depending on the circumstances of the case, both you and the agency may be considered the employer for the purposes of assessing liability.

Most laws still apply

OK, so now you know you might not be able to avoid liability by hiring a temp. What employment laws apply to temps?

Turns out, basically all of them.

  • They’re protected from discrimination and harassment on all the same grounds as permanent employees.
  • They’re covered by the Fair Labor Standards Act and most other wage and hour rules to the same extent as your permanent workers.
  • They are covered by the same workplace safety regulations as permanent workers.
  • And so forth…

All of which means, a “cost-saving” temp can potentially end up costing you a lot of cash if they file a complaint claiming they were discriminated against, harassed, underpaid or subjected to unsafe working conditions.

What to do?

First, it’s probably best to go through an agency, but make sure the agency you deal with is reputable and reliable. Make sure they’re aware of (and follow) EEOC guidelines, wage and hour laws, medical leave laws, and so forth.

Second, give all contingent workers the same orientation you would give to permanent employees. Make sure they’re aware of your company’s commitment to compliance with employment laws and regulations. (By the same token, it’s probably a good idea to make sure you also train your supervisors and managers to know the temps are covered by these employment laws, too.)

Third, provide clear on-site contact channels for temps to follow if they have questions. Designate someone within the HR department as the liaison between the temps and the company and the agency, so any issues can be identified and resolved before they reach the level of legal action.

Oh, and here’s a bonus tip from my own experience: if you’re hiring temps because you’re expanding but aren’t ready to hire permanent workers until you know the growth will be sustained… be sure to check with the agency to find out what sort of fees they would charge or restrictions they would have in place should you decide you want to hire one or more of the temps for permanent positions. It’s a sad day when one of your temps to turn out to be the perfect worker, but you’re unable to hire them for a permanent job because the placement fees turn out to be prohibitively expensive.

The bottom line: with a little foresight and planning, contingent workers can provide a cost-effective workforce when you need short-term assistance or you’re simply not quite ready to hire permanent workers.

Does your company use contingent workers? Through an agency, or do you find them on your own? Are you concerned about potentially being considered a joint employer? What steps have you taken to protect yourself from liability? Use the comments below to let me know your thoughts!

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