Workers Comp Coverage for Temp Employees

For the most part, workers’ compensation guidelines for staffing agencies, or employers, are the same as if they were permanent employees, except when it comes to paying insurance premiums. The temporary staffing industry is responsible for ensuring that each employee it sends on a job is covered for accidents, injuries or illnesses with the proper amount of staffing insurance as outlined by state laws.

Jobs classification

Jobs are classified by a risk classification under workers’ compensation, and as an owner of a staffing agency should know, this is coupled with the type of work the temp employee is being asked to perform. For example, providing office workers is much less of an insurance risk than providing workers for warehouse duties. Each job must be classified according to the risks associated with the job in order to ensure the correct amount of insurance coverage has been obtained.

Accurate recordkeeping is important

Temporary staffing agencies must also keep accurate records of all temp workers. This includes where the employee worked and for whom, the type of work being performed, the number of hours completed, and the rate of pay. This information is vital for setting the premium rates for your workers’ compensation insurance. Records should contain the employee’s name and social security number, along with a date of hire, job title, termination date, compensation type (such as hourly or commissioned salary), payroll deductions, gross pay and job classification.

Workers’ compensation premiums for temporary staffing agencies continually change based upon the number of workers in a given period and the number of hours that they’ve worked. For commissioned employees, staffing employers might need to choose between the actual number of hours worked or assume an eight-hour, five-day work week for calculation purposes.

Most staffing agencies use a work order system to provide services to companies that need temp workers. The work order, or job order, is the request made by the prospective employer to the temp agency. Work orders must be made for each employee on assignment to ensure accurate workers’ comp coverage.

Injuries and accidents are an unfortunate part of running a business, and your staffing insurance provides for employees unable to work due to on-the-job incidents that result in the temporary or permanent disability. Not having a policy is not only negligent but in most states, it is also illegal. Speak to an agent about your requirements regarding coverage.


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