As a business owner, what should I know about using temporary workers?

Generally, temporary work is any work that is not intended to be permanent or long term. Temporary work can be full- or part-time.

Use of temporary workers (sometimes referred to as temps) may provide you with some flexibility to handle employee absences due to illness, vacation, or maternity leave. They may also help you handle special projects, busy times, or seasonal work.

In a slow economy, temporary workers might be used until permanent needs become more certain. The  temporary employee can be more easily let go if need be.

Temporary workers can be hired directly or through a temporary employment agency. Temporary workers you hire directly, even if part-time, are generally treated the same as full-time workers and may be entitled to employee benefits through you. For example, a worker who completes 1,000 hours of service in a year may be eligible to participate in your retirement plan.

On the other hand, a temporary employee hired through a temporary employment agency works for the employment agency, not for you. The employment agency is generally responsible for the temporary employee’s benefits, if any. The hourly wage rate you pay to the agency may be higher as a result.

The temporary employment agency can save you time and effort by finding and screening potential employees so that you don’t have to. They may have a pool of temporary employees available at any time and at a moment’s notice.

However, you may need to break in or train a temporary employee each time you get one from the employment agency. To minimize this, you may request that the employment agency send a temporary employee who has alreadyworked for you before.

Sometimes a temporary employee may become a permanent employee. If an employee was hired through a temporary employment agency, depending on the contract with the employment agency, you may need to pay a fee to the agency if you permanently hire the temporary employee.


Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2012