“How long can I be a temporary employee?” It’s a question staffing firms hear often from candidates, clients, and even auditors. But despite how simple it sounds, there’s no straightforward answer. That’s because no single federal rule defines “temporary” work. Instead, the Affordable Care Act (ACA), individual states, and various agencies like the Department of Labor and the Internal Revenue Service (IRS) each offer their own interpretations.
And that’s where things get complicated. For staffing agencies, this inconsistency opens the door to real exposure. Missteps in classification, overtime pay, or benefits eligibility can all spark employment-related claims. That’s why employment practices liability insurance (EPLI) plays a critical role. It helps safeguard staffing firms from claims tied to temporary employment.
Partnering with a provider like World Wide Specialty Programs gives agents a clear path to protect staffing clients against these evolving risks. Explore staffing agency insurance options to guide your clients through questions like “How long can I be a temporary employee?” with clarity and confidence.
Why Temporary Employment Rules Matter for Staffing Agency Insurance and EPLI
Staffing agencies often assign employees for short periods. But sometimes, those assignments can stretch past six or 12 months. That extra time can change the agency’s legal responsibilities. Depending on the situation, the employee might qualify for overtime, ACA benefits, or full-time status.
The issue is that every regulatory body sees things a bit differently:
- ACA says full-time is averaging 30 or more hours per week.
- IRS and state agencies may assess “temporary” based on duration, employer intent, and job expectations.
- Wage and hour rules apply regardless of labels like “temp” or “contractor.”
These unclear definitions leave staffing firms vulnerable, especially if a worker believes they were wrongly denied full-time protections. Even if a firm acts in good faith, misunderstandings can still lead to lawsuits.
EPLI helps fill that gap by providing legal defense against allegations like discrimination, wrongful termination, or misclassification. However, most EPLI policies exclude wage and hour claims by default, unless specific endorsements are added. Thus, agents should always check for this coverage extension.
The Joint Employer Standard and EPLI Exposure
In March 2024, the National Labor Relations Board (NLRB) broadened the joint employer rule. Now, staffing agencies and their client companies may both be considered “employers” if they share direct or indirect control over job conditions like wages, schedules, or supervision.
This shared responsibility raises the stakes for staffing firms. If a client mishandles a harassment complaint or retaliates against a temp worker, the staffing agency may still be liable even without direct involvement.
That’s why EPLI coverage must be built to account for co-employment scenarios. Policies should:
- Cover both in-house and placed employees
- Include defense costs tied to a client’s actions
- Offer broader definitions of “employment-related acts”
We recommend agents review contracts closely for joint employment indicators and flag them early. EPLI coverage should match the liability risks in each partnership.
Misclassification and Other Red Flags: How Agents Can Protect Staffing Clients
Misclassification is one of the most frequent triggers for EPLI claims. A worker might be labeled exempt from overtime or left off a benefits plan due to assignment length. But once that assignment goes longer than planned, things get murky.
When this happens, staffing firms may face:
- Wage and hour lawsuits (note: it’s often excluded unless specifically endorsed)
- Retaliation or wrongful termination claims
- Discrimination tied to assignment length
- Denied benefits due to misclassified employment status
Even compliant staffing firms can be caught off guard by administrative mistakes, poor documentation, or ambiguous contract language. As if that weren’t enough, recent data shows that temporary employment is declining in 2025 amid economic uncertainty and rising business bankruptcies. This complication increases liability for agencies as placements stretch longer than intended.
That’s where EPLI earns its keep. It doesn’t replace compliance, but it offers a cushion when honest mistakes or economic circumstances become legal problems.
As agents, you need to:
- Help clients connect “How long can I be a temp?” to real-world legal exposure
- Flag vague contract language tied to assignment length or benefit eligibility
- Recommend EPLI as part of every staffing agency’s core coverage
Safeguarding Staffing Agencies With EPLI Amid Evolving Employment Laws
Laws change, and joint employment risks are rising. EPLI has become foundational for staffing firms managing both internal staff and temp placements. Agencies must protect themselves not only from their own employment practices but also from the actions and inactions of their client partners.
That’s why World Wide Specialty Programs created EPLI coverage specifically for staffing firms. Our policy features include:
- Coverage for both internal and placed employees
- “Duty to defend” provisions from the first notice of claim
- Broader definitions of “claims,” including hostile or discriminatory environments affecting non-employees
- Clients insured under the EPLI policy per the terms of their service agreement, not just listed as additional insureds
- Access to HR Cares, a dedicated online portal offering compliance updates and HR resources to EPLI policyholders
These features reflect the risks firms face every day, not just textbook scenarios.
Note that while EPLI is not a substitute for legal counsel or HR best practices, it’s a key part of any staffing firm’s risk-management plan.
Call us today to learn how World Wide Specialty Programs can help your staffing clients secure EPLI and employment agency insurance that responds to today’s legal realities.
FAQ About Temporary Employees
How long can someone be a temporary employee?
There’s no universal federal time limit. But as assignments extend, especially beyond one year, staffing firms face higher risks related to ACA compliance, benefits eligibility, misclassification, and discrimination. The longer the placement, the greater the EPLI exposure.
What risks come with extended temp work?
Extended temp assignments often blur the line between staffing firm and client responsibilities. This overlap can increase joint employer claims, wage and hour liability, and lawsuits tied to discrimination or wrongful termination. EPLI helps staffing firms manage these exposures.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.