Temporary Employee Laws


Legal Smarts: Hiring Temporary Employees

The holidays are coming up, which can mean hiring temporary workers in retail and other industries. Do you know how to protect yourself against claims of unfair pay, benefits requests payments, and other temporary employee legal issues? Temporary employee laws abound so it’s important that you’re well informed. Here are some of the A-B-C’s of law relating to temporary employees that will help keep your company off of Santa’s “naughty” list this season.

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Temp Employee Tip No. 1: Temporary employees may be entitled to certain employee benefits like medical insurance and enrollment in your retirement plan. Depending upon the length of time the temporary employee is in your service, they may earn the right, whether by company policy or law, to enroll in the benefits programs available to permanent employees. For example, many companies allow employees to enroll in the company-sponsored medical insurance program after three consecutive months of full-time service. However, it may not be your intention to provide benefits to your temporary employees. To avoid this potential benefit drain, revisit your existing policies related to FMLA leave, medical insurance, and other employee benefits to ensure that you are not unwittingly opening up your insurance benefits pool to the crop of temporary employees in your midst.

Under the federal employee benefits law, Employees Retirement Income Security Act (better-known by its nickname, “ERISA”), workers who log over 1,000 hours in a 12-month period on the job are entitled to participate in the pension or retirement plan offered by their employer. To inoculate your company from inadvertently opening up pension enrollment, carefully track the hours logged by your temporary employees. As a preventative measure, create a work schedule and term of employment that will not cause the temporary worker to breach the 1,000 hour rule.

Temp Employee Tip No. 2: Don’t attempt to disguise temporary employees in volunteers’ clothing. Use your volunteers only for volunteer-type work. It is often tempting to enlist people to work under the title of “volunteer” who will perform all the functions of a paid employee, but for free. However, as Shakespeare might say, an employee by any other name . . . is still an employee. In other words, just by naming the worker a “volunteer” does not automatically give the employer a free pass regarding wage and hour law and other potentially nasty employee legal entanglements. The true volunteer may donate their services to your organization so long as the understanding and intent of the volunteer is that the services provided will not be for pay or will necessarily result in employment at the end of the volunteer stint. Keep in mind that it may raise a few eyebrows at the IRS if the “volunteer” is engaging in the core functions of the organization. For example, candy-stripers in a hospital are commonly considered volunteers. However, if that same candy-striper is providing nursing services or performing open-heart surgery, then it is less likely that their “volunteer” title will pass muster.

Temp Employee Tip No. 3: It may be worth your while to use a temporary employment agency to staff your temporary uptick in workforce needs. Although the employee’s employment is intended to be temporary, it may turn into a long-term drain on your company because temporary employees are entitled to draw unemployment benefits. Temporary employment agencies can, however, serve as a buffer in this regard because the agency is considered the employee’s employer, not your company. Although you will pay more in an hourly rate to hire employees through the agency, your liability will be capped at the hourly rate and you will not have to worry about unemployment claims.

Temp Employee Tip No. 4: Temporary employees have just as many legal rights as permanent employees when it comes to equal pay claims, sexual harassment lawsuits, and the panoply of other employment-related civil rights claims. In other words, what begins as a temporary worker relationship can turn into a protracted and enduring litigious relationship if the customary precautions are not observed. One major first step in building your litigation buffer is to have your temporary workers go through some modicum of orientation sessions which include a crash course in the company’s equal employment opportunity policy, anti-harassment policy, and mandatory reporting requirements. As icing on the cake, the prudent employer will distribute employee handbooks to their temporary employees and collect signed acknowledgement forms confirming that the employee is bound by the aforementioned policies.

Around this time of year, ‘tis the season to seek out temporary employees to supply the extra manpower needed to weather the anticipated boom in seasonal business. While you respond to the increased demand for employees, don’t forget to stay savvy about all of the trappings of permanent employees that generally apply to temporary ones as well.

Regards,

Merisa Heu-Weller
Davis Wright Tremaine LLP

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12 Comments on "Temporary Employee Laws"

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fiona chatmon
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fiona chatmon
2 years 9 months ago

    

alison green
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alison green
1 year 3 months ago

I have waited almost four weeks to be paid for an event i worked at for a temp agency in new york.They said they mailed the check..i dont believe that.Who do i contact to report them and get my money ..i worked a total of two days.thanx.

Dina
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Dina
1 year 1 month ago

Does an employment agency still have rights over me, after over two years at a temporary assignment they sent me to. The company I temp for would like to hire me directly. What is there obligation to the agency, if any.

brenda sullivan
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brenda sullivan
9 months 14 days ago
The company I work for has 3 different temp. services. I work with a lady that has been a temporary for the company for nearly 4 years. During this time temp. agencies have been released for management problems within the temp agency. She was placed in a pool with the company for a brief time until a new temp agency came in. Then one temp agency merged with a new agency. All the while she received raises every 3 months or so. Now the agency recently merged, they say she is over their salary cap so they are taking $1.25/hr… Read more »
Samari
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Samari
8 months 28 days ago

Just got hired on with a large financial firm through a recruiting service. For the 1st 6 month probation time, the recruiting company is paying my salary. They have sent me several pages of forms to sign up for Medial, Dental Insurance coverage; life insurance; and a 401K plan. I don’t want to do this because I would prefer to sign with the financial firm after the 6 month probation. Is this ok or common practice by the employee?

Kim
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Kim
8 months 9 days ago

I’m a temp for a company that will be closed between Christmas and New Year’s. Their company policy states that temps who have completed 30 days of employment and who work the day before and the day after the holiday will be paid for this time off. When asked, they told me that they don’t pay temps. What’s my recourse here?

Ann
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Ann
7 months 11 days ago
Started working for a company that trains you on bus and started training with them on September 28th would like to know how long does it take for an employee under Michigan law to be considered as an employee I train there until the 16th of November when they told me they were stopping my training. At the very beginning they told me that I was not an employee and not considered me as an employee until I went through the training and I passed the exam then I would get paid as well as I would get a job… Read more »
ben
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ben
7 months 5 days ago

I work 40 hr a week as a helper on a truck for a agency for 2yrs but 4 months ago the agency started taking 2 1/2 hrs away for lunch break that they KNOW I’m not taking who can i get to help me because the company & the agency told me to start work earlier and leave later to fix my hours ” i need help”

Bebe Byrd
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Bebe Byrd
5 months 26 days ago

I was hired as a contractor with a 3 month contract for 20 hours a week. Right off the bat I have worked over 40. Now they want me to sign up with a temp agency. I want what they offer (the original co) to their employees as they pay for their health ins get sick and vacation days and have a 401 matching plan, none of which I qualify for. I am able to purchase health insurance through the temp agency, how long do I work on a temp basis before I’m considered full time?
Thanks

George
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George
4 months 24 days ago

Does this apply in texas or just certain states .
As far as the temp. employees. Please advise

Jgzalez
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Jgzalez
4 months 23 days ago

I was working through a temp agency and given the aplication to become full time and filled it out— is my date of hire the day I started through the agency or the day I singed the application?

Thakane
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Thakane
3 months 23 days ago

I have been working for this company as a temporary employee for three years now,i handed my resignation letter serving a two weeks notice then i left the company but what got my attention is that at the end of the month i did not get a salary or any money from the company.i would like to be adviced on what are my options,am i not entitled to get something out of my three years working for the company

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