The Myth of “Temporary Employees”

IMG_1067What is a “temporary employee”? I have practiced employment law for 20 years (Note to self: Keep practicing; someday you’ll get good at it.) and I can’t tell you. It’s a state secret. All lawyers have been sworn to secrecy forever.

Either that or, if you really want to know and say “pretty please” (with or without sugar on top, but no artificial sweetener please), that term has no legal significance. Usually the term is used to mean one of two things:

  1. your employee, hired on a trial basis with some sort of probationary period; or
  2. a staffing agency worker, retained to augment staff levels on a temporary basis.

Under option 1, the “temp” is a regular W-2 employee of yours, probably employed at will like your other employees, but whether you call that person “temp” or “permanent” or “regular” or “irregular” (?), none of it matters. A temp worker who is your employee, paid subject to deductions, is your employee.  Temp time counts toward FMLA eligibility. Temps are subject to minimum wage and overtime rules. You have some flexibility in how you apply your internal policies for temps on issues like vacation eligibility or PTO accrual, but these are really just regular employees. Affordable Care Act requirements relating to offers of coverage and counting likely apply as well.

Under option 2, workers supplied by a staffing agency and integrated into your workforce are probably your joint employees. Usually these workers are subject to your supervision, work in your facility, and take direction from your managerial staff or team leads. Under most tests, those workers are likely to be considered your joint employees.

What is the impact of these workers being your joint employees? I have posted about this subject elsewhere in this blog (look for tag/category: joint employment), but in a nutshell:

  • If they are joint employees under the FLSA, you are jointly liable for any failure to pay overtime or minimum wage, even if the error is the staffing agency’s fault;
  • If they are joint employees under employee benefit laws, they may be eligible for participation in your 401(k) plan or for health and welfare benefits, subject to plan language (Affordable Care Act requirements may apply);
  • If they are your joint employees under employment discrimination laws, you may be liable for any discrimination or harassment.

In all likelihood, the staffing agency’s payroll deductions are covering workers comp and unemployment coverage obligations, but if these are your joint employees, you may be liable if the staffing agency fails to provide proper coverage.

Summary: The term “temp” may have an internal meaning, but it is likely of no legal significance. The laws covering regular employees (or joint employees) most likely apply equally to those workers you call “temps.”