Do Temps Expose Your Business to Financial Risks?

Hiring temporary staff often seems like a great idea when work is overwhelming your staff or during peak seasons. Temporary staff can be available in a few hours after calling a temporary staffing agency. However, are temporary workers exposing your business to financial risks?

Employment Agencies May Misclassify Workers

There is more to being an employee and being a contractor than whether you get a W-2 or a 1099 at the beginning of the year. As an employer, if you request a temporary employee, then you should receive a temporary worker who you can trust to get the job done. Unfortunately, many temporary agencies may be sending over independent contractors, who you cannot dictate to concerning how they get the job done. Working independent contractors as if they were temporary employees could result in your business getting sued. It’s important that you explicitly request the type of worker you want while making the initial request.

Some Temps are Not Qualified

As a business owner, you have to know where you can place a temporary worker and where you cannot. Depending on the complexity of the tasks, you may have to consider rotating some permanent staff around to ensure they work on complex tasks that you may not wish to entrust to temporary workers.

Without an overall understanding of your business processes, temporary workers could miss safety procedures and jeopardize the integrity of your business product. Depending on the severity, any change in batches could lead to thousands of defective products or a product that may harm someone after it’s on the market.

Temporary Workers May Be a Risk to Your General Liability Insurance

Who covers the cost when a temporary worker is hurt on the job? It wouldn’t be covered under workers compensation; that’s exclusively for an employer-employee relationship. But your general liability business insurance may be at risk. Since general liability insurance may cover third parties injured on your property, hiring a temporary worker may expose your business to lawsuits.

Before your business considers using a staffing agency to help your permanent staff keep up with production, you should consider all the potential financial risks to your business. Although temporary workers may be a low-cost alternative to hiring additional employees, you must factor additional risks in order to make an educated decision. Your independent insurance agent can help you assess the affects temps could have on your coverage.

Cover your risks today. Call Key City Insurance at (866) 466-2109 for more information on Salt Lake City business insurance.