Staffing agencies earn money by simplifying the recruiting and hiring process for other companies. While most businesses are looking for temporary or permanent employees, some prefer to use contract labor. Here are some things to consider when placing an independent contractor in a staffing agency.

Employee Classification

To avoid being penalized by the IRS, it is important to maintain a clear distinction between employees and independent contractors. A document that clearly describes the relationship between the staffing agency and the contractor is a good idea. Also, be careful of situations in which the line between employees and contractors begins to blur, such as when a client asks that a contractor from your agency be assigned on a permanent basis.

State and Federal Regulations

Laws vary widely from state to state, so be certain that you are in compliance. For example, in New York, all employers must provide a written statement of projected wages before a contractor or employee is allowed to begin work. Other regulations to check on include the following:

  • Minimum wage
  • Workers’ compensation
  • Non-discrimination
  • Unemployment benefits
  • Affordable care act exemption requirements

Including independent contractors allows you to cast a wider net in your search for qualified applicants. Just remember that there are many differences to keep in mind when doing so.