Staffing Agency Workers Compensation Part 1: Temporary Employee Risks

Staffing Agency Workers Compensation Part 1 Temporary Employee Risks

Staffing Agency Workers Compensation Part 1: Temporary Employee Risks

Your staffing agency clients must consider many factors when it comes to their business operations, from ensuring that they keep their clients and candidates happy to purchasing Staffing Agency Workers Compensation insurance to protect themselves financially should a claim occur. Staffing agency workers compensation not only covers their in-house employees, as we will discuss in part 2 of this blog post, but the temporary employees they send out as well.

Your staffing agency clients are responsible for ensuring that each employee they send on a job is covered with the correct amount of staffing agency workers compensation insurance based upon the actual job being completed. For example, office workers would be considered less of a  risk than warehouse or manufacturing workers. Each job must be classified according to the risk associated with it to ensure the correct amount of insurance coverage.

Below are further guidelines to share with your clients on how to manage temporary employee workers compensation risks.

Maintain accurate recordkeeping. This includes recording where the employee worked, the kind of work done, the amount of hours completed, and the rate of pay. This information is important for setting the premium rates for the workers compensation insurance. Records should include the temporary employee’s name, Social Security information, job title, date hired, termination date, compensation type, payroll deductions, gross pay, and job classification.

Track worker hours. Workers compensation premium for temporary staffing agencies continually change, based on the number or workers in a given period and the number of hours they worked. This requires your client to report the hours worked for all employees, including those paid on a salary basis and any temporary employee currently on an assignment.

Establish work orders. To ensure accurate staffing agency workers compensation coverage, work or job orders must tie back to the number of temporary employees currently on assignment. A work order should include pay rate information, job start state, job classifications, and the number of employers the agency is to provide.

Check with your state’s labor department for workers compensation laws. To ensure that the staffing agency is following the rules if their client elects to direct-hire a temporary employee, it’s a good idea to check with the state’s labor department for state-specific laws. In most cases, temporary employees are treated the same as permanent workers, except for the benefits associated with working full time.

World Wide Specialty Programs is the leading provider of insurance for the staffing industry. From General Liability to Temporary Employee Workers Compensation, we make it our mission to educate the staffing industry on the best coverage plans for them. Please contact us today at (877) 256-0468 for more information. 

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