Contingent employees can pick up the slack when business gets busy, but structure the relationship carefully—or their liabilities may linger long after they’re gone.
Nearly every business uses part-timers, temporary workers, and/or interns at some point—and it’s easy to see why.
The flexibility is nice. The jobs of vacationing employees have to be covered. There are sudden workload increases that require extra hands on the oars. Temporary workers are a seemingly ideal solution.
Are there any risks in employing temporary employees?
We recently discussed this issue with Laura E. Innes, an employment law attorney with Simpson, Garrity, Innes, & Jacuzzi, PC, and Drew Langevin, a management consultant. Both are based in the Bay Area.
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Most “contingent workers” come from temp agencies or professional employer organizations (PEOs), according to Innes and Langevin. These groups recruit and compensate the workers and ensure their employment complies with applicable law. Another source is employee leasing agencies, which do the same except for the recruiting, which the client company does.
Your responsibilities to temporary employees
Your company has responsibilities to temporary workers, even though you’re not directly paying them. “When you bring on someone’s employees, they are also your employees,” says Innes. “This is something employers often forget.”
She explains that if workers are directed and controlled by you, you’ve formed a joint employer relationship with the sourcing agency. You and the agency are both responsible for ensuring that temps are covered by workers’ comp and wage/hour standards and that they have an I-9, W-4 and Social Security number on file. You also need to be sure that the agency has not improperly classified employees as exempt under FLSA rules when they shouldn’t be.
You are not required to offer contingent workers the same benefits as employees, Innes and Langevin note, but you need to be careful that they don’t become eligible for benefits without your intending it. “Look at how your plans define eligibility,” says Innes. “If it just says ‘employee,’ you’ve left yourself wide open. Instead, have it read ‘employees on the payroll to whom we issue a W-2.'”
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Tomorrow, we’ll cover more tips on temps from Langevin and Innes. We’ll also explain how you can attend an in-depth 90-minute webinar on this topic next week—absolutely free.