For years companies have used temporary employees as a convenient and economical way to meet last minute and short-term staffing crunches. Using temporary employees can provide employers with flexibility as well as reduce their long-term investment in individual employees. It also gives them the option of reducing staff size without affecting the roles of their permanent employees.
But increasingly, companies are placing temporary employees in long-term positions, making them indistinguishable from regular employees, except for the fact that they are not receiving benefits (e.g., paid vacation time, group health insurance). 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 (e.g., administrators, paralegals, legal secretaries, etc.) that are provided under a contract with an agency. This is where temporary staff insurance can become vital if a claim against one of the temp staffers creates concerns.
Negligence and other workplace issues
It would appear that many temp agencies do not generally provide insurance that would cover direct or consequential damages if a temporary worker were negligent in performing their duties. Since they are not full-time employees covered by the company’s general policy, nor insured by the temp agency, these workers could pose an additional risk.
Employers and long-term temporary staffing
Temporary employees are different from “leased employees” however, and their distinction matters for purposes of workers compensation coverage. To the client company, the temporary workers are usually considered independent contractors. To the leasing company, they are actual employees.
The leasing company being the one to receive the temps’ time sheets and cut their paychecks typically evidences this. When the placement is for a few days, a few weeks, or even a few months, this demarcation seems clear to everyone. But what happens when the placement occurs for more than a few months? Can the client company still treat long-term temporary workers as independent contractors, or do they become permanent employees?
There is obviously a lot to consider and a lot at stake. Temp agencies need temporary staff insurance to protect their interests and those of their workers, but there are layers to the types of coverage necessary to fulfill all aspects of the business. Speak to an agent knowledgeable in staffing insurance for more clear and concise answers.