Temporary employment is an employment arrangement that is intended to last only for a limited period of time from its inception, for example, a week, a month or half a year. It may also terminate because it was undertaken to serve a certain specified, limited goal and the goal is achieved, such as the completion of a construction project.
The U.S. Department of Labor (DOL) says that a temporary work appointment is one that lasts one year or less and has a specific end date. Federal law also provides that an employer cannot hire the same temporary worker for more than two consecutive years.
Temporary workers are often hired through employment agencies that specialize in recruiting and placing workers in temporary positions. The agency charges the employer a fee and handles all of the bureaucracy of employment with the employee, such as issuing a paycheck, making the necessary paycheck withholdings, completing necessary tax forms and the like. Usually, the agency takes a share of the amount it receives from the employer for its services and pays the temporary employee from that amount.
Is Temporary Employment the Same as Part-Time Employment?
Temporary employment and part-time employment are not the same thing. Part-time employment and full-time employment refer to the number of hours worked in a week. Full-time employment is considered to be 40 hours a week, while part-time is any number of hours less than 40 hours a week. Overtime is hours worked beyond 40 hours per week.
Temporary employment has more to do with the duration of the employment. Thus, a person can be a temporary employee, but may be working either part-time or full-time hours. Temporary employment can be contrasted with “permanent employment”, meaning that the worker’s employment will not be terminated as long as they perform their job duties competently.
An example of a situation in which a company needs temporary workers is when one of its employees cannot work for a period of time, perhaps due to illness, maternity leave or a temporary disability of some kind. The business does not want to replace the employee permanently, however they need someone to fill in only for the duration of the permanent employee’s absence. This is when the business would hire a temporary worker to fill in only until the permanent employee can return to their position.
Or, a company may anticipate needing more workers for a particular project, but knows it will need them only until the project is completed and then they will no longer need their services. This is a situation in which a company wants temporary staffing to last only until the special project is completed.
Usually a temporary employee is not entitled to any of the benefits that permanent employees enjoy, such as health insurance, sick leave or paid vacations. They should not expect to receive promotions, reassignments or a transfer.
On occasion, an employer might be impressed with the job performance of a temporary employee and want to change their status to permanent employee. In that case, the employment of the temporary worker would be renegotiated. The agency who has placed the temporary worker might play a role and would expect to be compensated.
The fee paid to an employment agency that placed a temporary worker with a company when the company decides to hire the employee as a permanent employee is called a “conversion fee”. The amount of the conversion fee would be something that is negotiated between the employer and the agency, without the involvement of the employee. The employee would negotiate the terms of the permanent employment relationship with the employer.
What are Some Different Types of Legal Claims Associated With Temporary Employment?
Temporary employment arrangements are associated with very specific types of legal claims. These can include:
- Discrimination: Temporary workers may face discrimination just as permanent employees can. Discrimination can involve pay, benefits or whether a temporary employment agency offers temporary workers opportunities on the same basis;
- Wage and Hour Claims: There can be disputes over how much the employee is paid or how many hours the employee worked;
- Overtime pay exemption issues: There may be an issue about whether the employee should be paid overtime for hours over 40 worked in a week.
- Workplace Safety: Some jobs are dangerous and require careful training of employees in safety measures. On-the-job injuries have been shown to be more frequent with temporary workers. The employer has to supervise temporary workers to ensure that dangerous work is done in a safe manner. If not, temporary workers may end up making workers’ compensation claims.
- Clear Communication about Terms of Employment: Some recent court decisions have highlighted the fact that businesses should take care to communicate clearly in their contracts for temporary staff. They must make sure to communicate to the worker what their status is and that it does not include eligibility for the same benefits provided to permanent employees. Also, businesses should, of course, be sure to treat temporary workers with the same respect and care shown to permanent staff.
- Eligibility for Retirement Benefits: DOL regulations provide that an employee who works for 1000 hours or more in one year is eligible to participate in a company’s retirement plan. This means that a temporary employee who works approximately 20 hours per week or longer would become eligible to participate in a company’s retirement plan. A company would want to plan accordingly and if one of its temporary employees is expected to work over 20 hours per week, make provisions for their participation in the company’s retirement plan.
- Social Security and Other Tax Withholdings: Temporary workers must still pay Social Security and Medicare taxes, workers’ compensation insurance and unemployment insurance. If they are technically employed and paid by an employment agency, the agency is usually the one who issues the worker’s paycheck and makes the necessary withholdings. If not, however, then the employer either has to do this itself or it must inform the worker of their obligation to pay quarterly withholdings to the IRS.
- Overtime Pay: The federal Fair Labor Standards Act (FLSA) covers both temporary and permanent workers, so both must receive overtime pay when they work more than 40 hours in a calendar week. Overtime pay should not be less than 1 1/2 times their base pay. For example, if a covered worker makes $10 per hour and works 45 hours in one week, then they are entitled to receive $20 per hour for the five hours over 40 hours.
- Not all temporary workers are entitled to overtime pay; some farm workers work on a so-called “piecemeal” basis and are not entitled to overtime. An agency and an employer both would want to investigate the FLSA and make sure they comply with its provisions regarding overtime. Also, if a company employs temporary workers through an agency, it would want to make sure that the agency is paying overtime if required by the FLSA.
Do I Need a Lawyer for Assistance With Temporary Employment Laws?
Temporary employment laws are meant to protect both the worker and the employer from violations. Agencies are often involved in the employment of temporary workers, adding to the complexity of the situation.
You may want to hire an contract lawyer if you need assistance with any type of employment matters or an employment dispute. Your attorney can provide you with valuable advice and legal representation in the event a lawsuit becomes necessary.