During a temp assignment, who is actually the employer — you or the client company?

What staffing and recruiting agencies need to publish

Employer-of-record status determines who is liable for payroll, taxes, workers' comp and employment claims, and both the client and the worker need clarity on this before the assignment starts.

How customers actually ask it

The same intent arrives in wording your page probably does not use. All of these mean the same thing:

  • “During a temp assignment, who is actually the employer — you or the client company?”
  • “co-employment staffing agency”
  • “who pays temp worker payroll taxes”
  • “workers comp temp employee liability”

What a complete answer contains

For staffing and recruiting agencies specifically, an answer is only complete when it covers all 5:

  1. 1

    The clear statement of who is the legal employer of record for payroll and tax purposes

  2. 2

    What that arrangement means practically for workers' compensation coverage

  3. 3

    The client's actual role and responsibility during the assignment despite not being the legal employer

  4. 4

    How unemployment claims and liability are typically allocated between agency and client

  5. 5

    The transition process and what changes if the client wants to hire the temp permanently

A worked example

Illustrative — not a real business

We are the legal employer of record for the duration of the temporary assignment, which means we handle payroll, tax withholding, and workers' compensation coverage directly — the temp employee is our employee, not yours, for the length of the placement. This arrangement, often called co-employment, means the client company directs the day-to-day work and supervises performance on-site, but the employment relationship, benefits eligibility, and liability for wage and hour compliance sit with us. Workers' compensation claims arising from an on-site injury are filed against our policy, not the client's, which is one of the practical reasons companies use staffing agencies for short-term or fluctuating headcount needs rather than hiring directly. If a temp worker underperforms or the assignment ends, unemployment liability generally follows the same employer-of-record structure. If you want to hire a temp permanently, that is a straightforward conversion, typically involving a placement fee based on a percentage of the role's salary, which we will detail before any conversion conversation with the employee.

Which page should own it

Employer of record and co-employment page

What silence costs

Unclear liability allocation surfaces during a workers' comp claim or unemployment dispute, exactly when confusion is most expensive to resolve.

More questions staffing and recruiting agencies get

Related

Does your site answer this already?

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