For the most part, workers’ compensation guidelines for staffing agencies, or employers, are the same as if the staff were permanent, except when it comes to paying insurance premiums. The temporary staffing industry is responsible for ensuring that each employee it sends on a job is covered with the correct amount of temporary staffing insurance, in the form of workers’ comp coverage, based on the job being completed.
Jobs are classified by a risk classification under workers’ compensation. As any temporary staffing agency knows, along with the type of work the temp employee is asked to perform, they must also be aware of the risks associated with it. For example, providing office workers is less of an insurance risk than providing workers for warehouse duties, or working in manufacturing. Each job must be classified according to the risk associated with it in order to ensure the correct amount of insurance coverage is obtained.
Accurate recordkeeping is important
Temporary staffing agencies must also keep accurate records on all temp workers. This includes the following:
- Where the employee worked
- The kind of work done
- The amount of hours completed, and
- The rate of pay
This information is important for setting the premium rates for the workers’ compensation insurance. Records should contain the employee’s name and Social Security number, along with date hired, job title, termination date, compensation type (such as salary, hourly or commission), payroll deductions, gross pay and job classification.
Workers’ compensation premiums for temporary staffing agencies continually change based upon the number of workers in a given period and the number of hours that they’ve worked. For commissioned employees, staffing employers might need to choose between the actual number of hours worked or assume an eight-hour, five-day work week for calculation purposes.
Job or “work orders” provide vital information
Most staffing agencies use a work order system to provide services to companies that need temp workers. The work order, or job order, is the request made by the prospective employer to the temp agency. Work or job orders must be made for each employee on assignment to ensure accurate workers’ comp coverage. In compliance with their temporary staffing insurance, a work order should include pay rate information, job start date, job classification and the number of employers the agency is to provide.