Properly Designating Workers for Insurance Purposes

employment agency insurance

For most people, the terms staffing agency and temp agency are interchangeable. While both organizations overlap in the way they operate, they are different and separate business models. They do, however, sometimes provide the same types of services. Staffing agencies usually offer a wider range of options on the type of candidates they provide, offering more solutions that will suit their clients needs. Both business models must rely on employment agency insurance to address exposures they face providing their specialized services.

Its a given fact that staffing agencies and temp agencies both provide their corporate clientele with workers dependent upon a particular skill set and experience level. In certain situations, corporate clients may ask the agency to fill a short-term position, even on very short notice, or they may give advanced notice of the need for a long-term or permanent position. The agency tasked with filling the position then consults its worker database, contacts a worker they deem qualified for the job, and sends them directly to the corporate client.

Where issues may need to be addressed

Most companies providing staffing to clients will utilize contingent workers in a variety of different ways. The often end up using a combination of temporary workers and independent contractors to satisfy their clients needs. But there are significant differences between independent contractors and temporary workers that should be understood, and erroneously referring to one as the other could lead to problems and ramifications. So getting the definition correct, and having clarity of the type of position and the work being committed to, is critically important.

Staffing agencies are in the business of providing on-site support staff to their clients from a pool of individuals that are hired (as employees of the staffing agency) and assigned to a specific company for a limited period of time on a fill-in basis, or perhaps for a finite project time span, usually for less than one year.

Independent contractors are specifically not temporary workers since they do not fill out time sheets, or are paid and taxed using a W-2 form. Independent contractors are responsible for the delivery of a product or service, by a specified deadline, no matter how many hours are spent working. Independent contractors are also responsible for calculating and paying their own taxes, generally using IRS Form 1099.

Employment agencies must carefully designate between temp and contract workers in order to remain compliant with regulations regarding workers. Having employment agency insurance helps to address any concerns related to this arrangement when issues occur.