Hiring temporary workers can be a great solution for many companies’ business needs. Often, they’re hired short-term to assist during seasonal busy periods or increased production seasons. Other reasons could be to bulk up a team while working on a specific short-term project, to fill in while an employee is on maternity or sick leave, or if a company just needs someone who specializes in a certain area for a few months.
Overall, hiring short-term employees is a great option for companies that are not ready to commit to a brand-new full-time employee. Here are a few things to keep in mind if you’re thinking about hiring temporary workers:
Understand temporary workers vs. contract workers
The difference between a temporary worker and a contract worker is the employment relationship. Employment relationship status is determined by the IRS common-law rules, the Fair Labor Standards Act, and other statutory regulations. An employment relationship must exist for a worker to be classified as a temporary employee. Otherwise, they’re considered an independent contractor.
An independent contractor is responsible for paying their own taxes, and they don’t receive any employer-sponsored benefits. They’ll also have total control over how work is completed. Businesses can face penalties for misclassifying independent contractors and employees, so be sure to properly classify any temporary workers you hire. Many times, determining the difference between a contractor and a temporary employee can be difficult to distinguish in the fine print, so you may want to work with an HR professional to assist you.
Temporary workers can be hired directly or through a staffing agency. If hired through a staffing agency, the person will be an employee of the agency, and the agency will be responsible for payment, taxes, and other applicable employment obligations.
Evaluate your short-term and long-term needs
It’s common for businesses to transition temporary workers to full-time employment after an initial “trial period” where they retain a temporary worker’s contract. To hire a temporary worker directly, you must ensure you follow both federal and state laws and an employment relationship must be present. Typically, the “trial period” will last around 90 days, and if performance is satisfactory, then the official employment contract is written up.
Weigh the costs of hiring temporary workers
It’s important to consider if it’s cost-effective to hire a temporary worker directly or through a staffing agency. During this decision-making process, you’ll also want to consider the costs of hiring the temporary worker as an independent contractor versus an employee.
Bear in mind that some staffing agencies will increase their staffing fees by up to 40% to make a profit on each placement, temporary or not. Therefore, depending on the situation, it may be more cost-effective to do the hiring yourself.
If you’re looking for hiring assistance or would like additional HR help without having to hire more staff, our HR Assist program might be just the solution for you.