How to Stay in Compliance With the Law When Hiring Temporary Staff

In the U.S., temporary employees have many of the same legal protections as permanent employees. But when a temp is hired through a staffing agency, the question of who is liable for any legal issues gets complicated. Depending on the legal issue, either the staffing agency, the client company, or both could be responsible for ensuring compliance with the law.

The Department of Labor’s Occupational Safety and Health (OSH) Administration (OSHA) sets and enforces the primary standards protecting temporary workers in the U.S. You may be subject to additional standards depending on the state and industry in which you are doing business.

Your Responsibilities to Temp Workers Under OSHA

OSHA enforces a variety of standards that require employers, including both staffing agencies and their clients, to protect temp workers. As a staffing agency’s client, you need to:

• Train workers on health and safety practices. The staffing agency and client company share responsibility for training workers. Temps must complete training in a language they understand before they start work on a project.
• Supply Personal Protective Equipment (PPE) if needed to minimize worker exposure to hazards. The client company usually has the primary responsibility for choosing, providing, and maintaining PPE as well as ensuring temporary employees use it. However, the staffing agency bears some responsibility as well.
• Communicate about hazards. The staffing agency and the client company are jointly responsible for informing and training temps regarding exposure to hazardous chemicals. The temps must complete hazard training before a new hazard is introduced, in a language they understand.
• Record injuries and illnesses. The employer that maintains day-to-day supervision over the temp worker is required to record their injuries and illnesses. In most cases, that means the client company bears legal responsibility here, not the staffing agency. However, the client company and staffing agency are expected to remain in communication about these matters.
• Protect workers from dangerous work environments. OSHA has additional requirements for employers whose workers are likely to be exposed to bloodborne pathogens, contaminated or insufficient air, excessive noise, hazardous energy, or heat-related hazards.
• Address ergonomic issues. The OSH Act requires employers to protect workers from ergonomic hazards. Client companies are generally expected to take the lead on assessing worksites for ergonomic hazards, mitigating those hazards, and training employees.
• Respect whistleblowers’ rights. Neither staffing agencies nor their client companies can legally retaliate against employees who report injuries or raise workplace safety concerns.

OSHA also has some more specific requirements you must follow if your temps are working in warehouses, construction, shipyards, agriculture, or driving powered industrial trucks. We recommend checking the relevant Temporary Worker Initiative Bulletin on the OSHA’s Protecting Temporary Workers page.

While the OSH Act is an extremely important law, it is not the only one that applies if you hire a temp. Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Fair Labor Standards Act (FLSA) also apply, among others. Different states and industries have additional legal requirements. 

It’s also important to make sure the temp is classified correctly. Temporary employees are different from independent contractors, who work with more autonomy and are considered self-employed. Misclassifying a temp could lead to back pay liabilities, back taxes, penalties from government agencies, and other challenges.

A compliance officer or legal professional can help you understand your obligations under the law. It also helps to work with a reputable staffing agency that has experience meeting its own obligations as a temp employer.

FAQs About Temporary Staffing Law

Q: Who is the legal employer of a temp hired through a staffing agency — the agency or the client company?

A: In most cases, the staffing agency is the temp’s “employer of record,” but the client company is still considered a “joint employer” under the law. That means both entities have some legal responsibilities to the temp. 

Both the staffing agency and the client company share responsibility for providing the temp with a safe working environment. Both can also be held accountable for workers’ rights violations, including wage, overtime, equal employment opportunity (EEO), and child labor violations.

Q: Can I legally end a temp assignment if it doesn’t work out?

A: Yes, you can. In most states, all private employment is considered “at-will” unless there’s a contract that states otherwise. That means both the employer and the employee have the right to end an assignment at any time, as long as it is not for an illegal reason. 

Please note that employers are not legally allowed to end an assignment in retaliation for reporting on unlawful activity. They also may not end an assignment due to discrimination based on legally protected characteristics such as race, gender, age, religion, or disability.

If you are an LG Resources staffing client and the temp we provide doesn’t work out, we will work with you to find a more suitable employee. We can often pull from a pre-existing pool of talent to find a good replacement.

Q: Can I hire a temp for a permanent position?

A: There are no state or federal laws that prohibit hiring a temp for a permanent position. At LG Resources, we often help companies find great long-term employees through temp-to-hire positions.

Q: If I hire temps through a staffing agency, am I liable for employment taxes or unemployment insurance?

A: No, employment taxes and unemployment insurance for temporary workers are the staffing agency’s legal responsibility. As the client company, you generally don’t need to worry about liability in these areas.

Q: Is the client employer or staffing agency responsible for workplace safety?

A: Both the client employer and the staffing agency are legally responsible for temps’ workplace safety, according to the U.S. Department of Labor’s Occupational Safety and Health Administration. Both must work together to meet legal requirements under the Occupational Safety and Health (OSH) Act of 1970 and other laws.

Q: Do staffing agency clients need to offer health insurance to temporary employees?

A: No, staffing agency clients are usually not expected to provide health insurance to temps that are employed through the agency. In most staffing relationships, the staffing agency has this responsibility for qualifying employees. However, it may depend on the contract between the staffing agency and the client company.

At LG Resources, our staffing agency gives temporary employees limited health benefits from day one. Temps who meet certain criteria can access a Minimum Essential Care plan that meets all ACA requirements and can cover either the employee alone or together with their immediate family members.

Q: Do unemployment claims come back to the temp agency or the client company?

A: Unemployment claims for temp workers hired through a staffing agency generally come back to the agency, not the client company. The temp agency is the “employer of record” for unemployment insurance purposes.

Q: Who is legally responsible for ensuring temps are paid wages and overtime correctly?

A: Both the staffing agency and the client company can share some legal responsibility for complying with wage and hour laws. The staffing agency is generally responsible for these matters, but client companies can also be held liable if they know that temps are not being paid in compliance with the law. However, client companies can mitigate their legal risk by working with a reputable staffing agency and ensuring that the contract clearly defines each party’s roles and obligations.

Q: If a temp is injured on the job, who is responsible for workers’ comp?

A: Workers’ comp responsibility depends on how a temp is legally classified and the state they are working in. If the temp is employed through a staffing agency, the agency is usually responsible for workers’ compensation. However, for temporary workers who are not employed through a staffing agency, the client company may be on the hook for workers’ compensation in some states, depending on the situation.

Request a Temp Employee Today

Looking for help hiring and managing temporary staff? Contact LG Resources today. We are an experienced staffing agency that recruits for light industrial, skilled labor, office, and other roles throughout Utah.