When Are Temporary Employees Eligible for Benefits?

October 28, 2019 | Staffing Blog

Companies that outsource hiring to a staffing agency want to know how benefits are handled for temporary workers. Each hiring situation is different for whether the burden falls on the employer or the staffing agency to provide benefits. Consider when employees are eligible for benefits in each situation.

Employee Benefits for Contract Positions

Every business has different employment needs. You may only need additional talent for a short-term seasonal need, a longer term project with a clear expiration date, or another one-off staff augmentation need.

In the case of contract positions, the staffing agency will handle benefits throughout the duration of the temporary work assignment. Many staffing agencies such as Allegiance Staffing will offer benefits to contractors to ensure that your company remains compliant with workforce standards.

Once the contract work is completed, the staffing agency will demobilize the talent and handle final payroll and benefits situations.

Employee Benefits for Temp to Perm Positions

Many companies prefer to outsource temporary-to-permanent positions. It creates flexibility to bring in qualified talent on a temporary basis, then have the option to hire the individual on a permanent basis after a set period of time.

Instead of committing to an employee, finding out the employee is not the right fit, and bearing the burden of unwanted turnover costs, taking this route of temp-to-perm is a desired choice for many companies.

As for employee benefits, your company typically is not responsible for handling benefits during the temporary stage. The staffing agency will handle benefits for the employee while on a temporary basis according to the talent contract.

If the employee is then hired by your company on a permanent basis, the employment contract may change to where your company becomes responsible for offering benefits to the employee.

Employee Benefits for Direct Hire Positions

A third category of temporary work — direct hire — places staffing agencies and employers in a different position. In this case, the staffing agency acts as a third-party recruiter that finds qualified talent for positions and directly places the talent in your company.

Because the individual is directly hired into your company, your company becomes responsible for their employee benefits.

A staffing agency helps during this process by bearing the burden of recruiting and hiring the talent. Then, there is a transition period when the talent joins your company’s payroll and starts to receive benefits. Depending on the terms of the contract between the employer and the staffing agency, there may be shared responsibility for the initial benefits period.

Work With Allegiance Staffing for Each Temporary Staffing Situation

We are fully capable of working with companies to support contract, perm to temp, and direct hire needs. We appreciate the opportunity to develop the optimal labor solution to optimize your labor force in a cost-efficient manner.

For temporary workers, we offer benefits that meet all the requirements of the Affordable Care Act (ACA), as well affordable contributory supplemental insurance that includes medical, dental vision, and short/long term disability. Certain partnerships with your company may include paid time off as an added benefit.

Contact us today to inquire about our labor solution and how we handle benefits for temporary workers in each contract situation.