That Works has an extensive report and checklist about what's known as the "contingent workforce." This includes temporary employees, leased employees, and more.
Below are key questions to consider when you work with temps, leased staff, staffing agencies, or other providers.
Questions to consider
- Who is responsible for what? As with any arrangement, study the contract carefully. For example, if an employee isn't working out, who is responsible for firing them? Consider every aspect of managing personnel from hiring through performance management, retention, and termination.
- How much are you paying to outsource various HR functions? Whether you're outsourcing because you lack time, expertise, or desire to do the work in-house, you will pay for those services. Ask about typical fees, the provider's experience and results, and interview several providers and their clients before choosing one.
- What is the provider's hiring process? Ask for the process in writing. If they cannot produce a documented process, consider another provider. Make sure the provider does proper skill testing, character assessments, background checks, immigration checks, and pre‑hire physicals where appropriate.
- What references can the provider offer? Request companies who have used the vendor in the past year and ask whether you may contact them. Do online research for additional comments. Also check the hiring staff's credentials and tenure to confirm the provider has the compliance expertise you may need.
- Does the agent carry the right insurance? Laws often require employers to provide workers' compensation and to withhold payroll taxes. Confirm who is on the payroll and whether the provider's insurance and liability arrangements protect your organization from misclassification or claims.
- Does the agency provide employees benefits? If a worker functions like your employee, they may be treated as your employee for benefits and other obligations. If the provider offers no benefits, you could face claims later, so clarify benefits and employer-of-record responsibilities up front.
- What about union activities? Determine whether the temporary workforce could be part of an existing bargaining unit or otherwise covered by a union contract, and ask the agency about past unionization efforts.
When evaluating vendor insurance and liability, review the provider's coverages and consider specialized outsourcing options such as Outsourcer (Vendor Liability / Outsourcing Coverage).
For staffing-specific policies and managed service arrangements, see Staffing - Managed Service Providers (MSP) Insurance to understand common protections and gaps.
Do your homework: interview providers, check references, and review written processes. If you need specific coverage guidance or quotes, talk to an agent.
HR That Works members should view the extensive Contingent Worker Report and Checklist for a more detailed review.
Frequently Asked Questions
What is a contingent worker?
A contingent worker is someone hired on a non-permanent basis, such as temporary staff, leased employees, independent contractors, or workers supplied through an agency.
Who is responsible for payroll taxes and workers' compensation?
Responsibility depends on the contractual employer-of-record and payroll arrangements, so confirm these details before engaging a provider.
How can I verify a staffing agency's hiring practices?
Ask for the agency's written hiring process, proof of background and skills checks, sample documentation, and recent client references.
Can temporary workers be part of a union bargaining unit?
Yes. Temporary or leased workers can be included in existing bargaining units depending on the contract and union rules, so review agreements and consult union representatives if relevant.