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Working with Temporary and Contract Employees

QUICK SUMMARY

Even if you can't afford to hire a permanent employee, temporary workers might offer a solution (even if it's a temporary one) when you desperately need the help. If you’re considering hiring a temporary employee, you’re not alone. One in eight companies relies on temporary help, according to the Associated Press. The number of temps is the highest since 1990 when the government began keeping records on this trend. Experts don’t expect this trend to reverse.

That’s because temporary workers help fill in the gaps, especially for growing companies with an unpredictable work flow. The temporary workforce goes by many names: temps, contract workers, consultants, freelancers, seasonal workers and interns. But whatever they’re called, they give companies flexibility when permanent employees go out on leave, business fluctuates and during times of increased short-term or seasonal needs.

Temporary and contract workers are proven productivity tools, but there are times when hiring permanent—or regular—employees is the better choice. Employment law dealing with temporary workers is tricky, so make sure you consult an attorney experienced in labor issues when contemplating any workforce decision.

Why Hire Temporary and Contract Workers

Hiring temporary and contract workers isn’t for every small business. There are many times when hiring a permanent employee is preferable to hiring a temporary one. But when a short-term or seasonal increase in business leaves your company shorthanded, temporary employees can help. These workers can also temporarily step in for permanent workers who go out on personal leave, vacation and sabbatical.

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How to Hire Temps and Contract Workers

There are three main types of transient workers. Temporary workers are employees of yours or of a temporary agency. Contract workers are hired to perform a job or task, but they are not your employees—they are in business for themselves. Interns are typically students who take internships to learn (not to perform tasks no one else in your company likes.) You can find these three types of temporary workers through professional associations, agencies, colleges, online job sites and through newspapers.

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What to Pay Temps and Contract Workers

Just as supply and demand influence what you charge for your company’s products and services, they also influence the cost of temporary and contract workers. The harder your position is to fill or the more experience and skill you require, the more likely you will pay top dollar for temporary help. Generally, to arrive at a fair compensation rate, consider the same factors you use to determine what to pay your permanent workers.

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How to Manage Temps and Contract Workers

How you manage your temporary workforce depends on the type of temporary worker you use. Temporary employees hired directly or through an agency are still employees. Manage them as you would any employee. Interns have certain limitations, both legal and practical. Contract workers are typically in business for themselves. You must treat them as you would any independent contractor or potentially risk running afoul of labor laws.

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Risk Management of Temporary and Contract Workers

Tax and employment law affects temporary workers, contractors and interns differently, and your company must understand these nuances. Temps and interns, for instance, have the same rights as everyone else to a workplace free of discrimination, harassment and workplace hazards. Tax rules differ, according to the type of temporary workforce you employ. Employing foreign nationals or hiring for overseas operations brings with it an entirely new set of legal concerns, for which you should consult legal counsel.

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