Top 8 Questions to Ask Before Choosing a Temporary Staffing Company

1. How many worker’s compensation injuries have you had in the past year?

Temporary staffing is important to so many industries – mainly because the worker’s compensation and liability are covered for the employee by the temporary staffing agency. However, temporary employees being injured on your job can be a problem for you and your company, especially if OSHA gets involved. Try to figure out which temporary agencies are employing safe workers, it will save you stress down the line.

2. Are the temporary workers 1099 independent contractors or W-2 employees?

As crazy as it sounds, some temporary staffing agencies have their employees as 1099. This means a few things- A. That the bill rate you are paying them does not cover worker’s compensation, liability or SUTA/FUTA. B. The temporary workers can sue your company directly if they are injured on the job site. C. The temporary staffing agency is pocketing the bill rate other than the wages the employee is receiving. D. The temporary worker is probably not carrying a worker’s compensation policy on themselves, especially if they are an unskilled worker. If they do have a personal WC policy, chances are it does not have the limits necessary to work on your site/facility.

Just because the temporary staffing agency sends over a certificate of insurance for their company, does not mean the worker is covered if they are an independent contractor. You need to find out if the worker is an actual employee of the agency before you allow them on your site.

3. Do the employees pay a fee to use the agency’s equipment?

Believe it or not, some agencies charge their employees a fee to use their PPE, tools, or other equipment. Many times the agency simply takes it out of the employee’s check at the end of the day. It is unethical, but not illegal in most cases. Asking this question will let the agency know that you are not ok with excess charges to the employee.

4. Do they charge an ACA fee?

Most temporary staffing agencies charge an ACA fee now. This can be anywhere from 1-5% on top of the bill rate. Knowing this fee in advance can assist with budgeting.

5. How often are bill rates raised?

The contractual bill rate is set at the beginning of the relationship. This cost includes worker’s compensation, SUTA, FUTA, liability, and the employee wages with all applicable taxes. This rate is usually set by the temporary staffing agency and depends on the location and job title. With minimum wage increases, bill rates are almost guaranteed to increase, however, some staffing agencies raise their bill rate every year regardless of minimum wage increases. Asking this at the beginning of the relationship will alleviate surprises later on.

6. Do they have an umbrella policy?

It is common knowledge that temporary staffing agencies cover worker’s compensation and liability, but sometimes that liability is not enough to cover damage. An umbrella policy being in place will help cover any excess damages that their liability policy did not cover.

7. Will they charge you a minimum if you do not like the workers?

Many times temporary staffing agencies have policies in place that allow for not charging if you are not satisfied with the worker. Staffing agencies as a general rule have a 4 hour minimum for each employee. Asking this question shows the agency that A. they need to send you quality employees, or you will be sending them home, and __B. __If they do not send quality, you are not planning on paying for the time wasted. You can usually tell if an employee actually wants to work within the first 2 hours, and if he/she does not, a simple phone call will ensure that the employee does not come back and you are not invoiced for the time.

8. Who do you contact for any invoicing issues?

Temporary staffing agencies are owned in many different forms. Some of partnerships with a corporate office doing all of the invoicing, some are privately owned and outsource the invoicing, some are corporate-owned and do invoicing in-house. The person you receive the invoice from is not necessarily the person who handles a billing issue. Often times the individual you should be speaking with is someone in the office building that send you the employee. If you try to contact the corporate office who only sent out the invoice and knows nothing of the employee, it can be a headache. Knowing this ahead of time can help your accounts payable department immensely.