Category Archives: Staffing Insurance

Temporary Staffing Insurance and Workers Comp Coverage

Temporary Staffing Insurance and Workers Comp Coverage

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 classification


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.


Keeping track of worker hours


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.


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Staff Insurance

Why Staff Insurance Is Vital

The importance of maintaining staff insurance for temporary staffing companies is evident because of the types of risks and exposures these businesses face on a regular business. They have to concern themselves with their legal liabilities in placing temporary workers, many of whom they may have little or no history with, in positions with clients that depend on them to put competent, honest individuals to work performing the duties of full-time employees currently not available to fill their positions.


In today’s litigation-driven world, the consequences can be extremely costly. Owners and supervisors of temp staffing firms need to be very detailed when both, interviewing and doing background checks to ensure that they are not hiring someone that may cause them issues down the road.


In addition, they need to be aware that they could face charges of discrimination if this process is mishandled in any way, or could be victimized by candidates that are merely looking for an “easy pay day” by filing a false claim of harassment, invasion of privacy, deprivation of a career opportunity, or other wrongful acts.


An employment practices liability insurance policy will cover costs for defense in any resulting litigation, but proper interviewing techniques and procedures can reduce the risks associated with these types of claims.


Other concerns requiring staff insurance


There is also the concern that, once placed, the temp worker may cause costly mistakes on the job, become involved in violent acts, steal from their employer, or involve themselves in acts of cyber crime or accidental cyber breaches. This problem is two-fold, since the staffing company can be blamed and held responsible for the acts of their temporary staff member, and they can also lose a valuable client, as well as suffer reputational loss.


These are real concerns that every owner must address and have training procedures that can help determine if they are sending the right person to do the job required of them. They value the relationship of the host clients and depend on them to keep their own businesses running smoothly. The bottom line is, staff insurance for the untold number of exposures in running a temp agency is the only secure way to operate a company of this kind.


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A Guide to Staffing Insurance

We’ve broken down common risks that the staffing industry might face and provided a staffing insurance solution to reduce that risk in this staffing insurance infographic.
Staffing Insurance

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Purchasing Staffing Insurance

We’ve broken down common risks that the staffing industry might face and provided a staffing insurance solution to reduce that risk in this staffing insurance infographic.
Staffing Insurance

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