What You Need to Know About Hiring Short-Term Employees
The hiring of short-term, seasonal, contract, or otherwise temporary employees is on the rise among U.S. businesses. In fact, the nation’s labor force currently includes more temp workers than ever before — some 2.7 million people, according to The New York Times.
Small-business owners can use temporary help to their advantage: By enlisting a short-term employee to complete a specific project, you can avoid hiring full- or part-time permanent staff for which your company may not be financially ready. Just make sure you understand the labor laws before you get started.
To steer you in the right direction, here’s look at a few best practices for hiring temporary employees.
Acknowledge the Need for Short-Term Employees
Begin by asking yourself why you need a short-term employee. Primary reasons may include:
- Covering for an employee who is out for an extended period (maternity or paternity leave, unexpected illness, disability, etc.).
- Hiring an expert or a manager for a specific project with a clearly defined timeline.
- Testing a new position before deciding to hire a permanent employee.
- Increasing staff for an anticipated busy season.
Temp jobs offer business owners flexibility and the ability to hire rapidly, and often appeal to workers, too. Just as it fulfills a staffing need for you, it fulfills a job need for the employee.
Finding the Right Resources
Since a need for temporary employees can be sudden, you don’t want waste time finding qualified employees. To find the best candidates quickly, many companies turn to outside staffing or recruitment firms, online job sites like LinkedIn, or forums or Listservs for your industry (or the desired expertise).
Once you find the right candidate, it’s important to evaluate that you’re getting what you paid for. “A company that uses temporary or seasonal employees without closely tracking hours, expenses, and employee performance can incur hidden costs, not to mention potential legal, financial, and security risks,” says Megan VanderGeest, marketing manager at Innovative Employee Solutions.
“Using a third-party employer of record to hire and pay these contingent employees is an excellent way to maintain a clearer picture of overall cost.”
Complying With Rules and Regulations
Just like any other employee, most labor laws — including workplace safety, harassment, discrimination, minimum wage, and overtime — apply to temporary workers.
Employer requirements vary by state, but you’ll typically pay worker’s compensation, Social Security, and Medicare. Benefits such as paid leave and health insurance are not required. All federal tax withholding laws also apply to seasonal and temporary employees.
In addition to providing recruiting and staffing services, outside firms can also handle the necessary paperwork related to payroll, benefits, and taxes.
“There are a number of legal ramifications to consider when hiring temporary/contingent employees. Unfortunately, businesses sometimes lack the personnel and know-how to ensure all hiring of contingent employees is compliant with both company hiring practices and federal and state tax laws,” VanderGeest says.
Cassady Sharp is a business writer for Intuit and is passionate about solving small business problems.