Understanding Staffing Workers’ Comp vs Employer Risks

Posted on: January 8, 2015 by NSMWorkComp

Understanding Staffing Workers’ Comp vs Employer Risks

The guidelines in place for temporary staffing agencies and traditional employers are basically the same, except when it comes to insurance policies and premiums. Depending on the job that is being completed by the temporary worker, they must have the right amount of workers’ compensation insurance coverage, to be provided by the temporary agency.

In the staffing workers’ comp world, job assignments are classified by risk classifications. Your client must know the type of work that each of their temp employees will be performing in order to understand the risks associated with it. For example, office workers will typically pose much less of an insurance risk than a warehouse or manufacturing worker.

Another factor that is important for your staffing agency clients to keep in mind is that workers compensation issues and lawsuits can arise long after the employee has finished a job assignment. This means that temp staffing agencies need to keep accurate records of where the employee worked, the type of work they performed, the amount of hours they completed and their rate of pay. These records should also include pertinent employee identification information such as their Social Security information, job title, date hired, etc.

In addition to reporting where the employee worked and their identifying information, temporary staffing agencies must also document the number of workers in a given period and the number of hours they worked, as well as a worker order that’s been provided to their clients. A staffing agency’s worker order for the employer includes pay rate information, job start dates, job classification, and the number of employees the agency is to provide.

One last consideration for your clients to make about their insurance coverage is if an employer decided to direct-hire a temporary worker, that employer must provide workers’ compensation insurance coverage for the temporary worker under the state’s workers’ compensation guidelines, since each state manages its own workers’ compensation programs. Your clients should advise their employers to check with their state’s labor department for further clarification.

NSM Insurance Group offers two exclusive Workers’ Compensation programs: Staffing Lines and AllComp Solutions. Our Staffing Lines program is designed for temporary and permanent placement, outplacement and executive recruiting firms. To learn more about our services, please contact us today at (855) 661-0627.

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