Business, Legal & Accounting Glossary
A temporary or contract employee. Temps usually receive fewer benefits than other employees.
A temp or temporary employee is a worker usually employed by an employment agency on a non-permanent basis. The employer contracts with the employment agency to provide the worker and pays an agreed to rate, usually per hour, for the temp. The employer provides no benefits and can terminate the temp at any time without paying severance pay.
Any benefits provided to the temp including holiday pay or vacation pay are provided by the employment agency, who is the temp’s employer of record.
Temps were originally used to fill in for employees calling in sick or on vacation or to fill short term needs for additional manpower. Originally it was mostly office workers and warehouse workers. But employers are finding temps less costly to hire than regular, full-time employees, who often receive costly benefits. Employers increasingly rely on a cadre of full-time employees to form the core of their operations to train and supervise the temps, but then fill in the ranks with temps to get the work done at a lower overall cost.
Increasingly professionals have been brought in as temps. That is because employers may have a need for extra manpower on certain projects, and experienced professionals are willing to work as temps. Computer programmers, scientists, engineers, and accountants are often hired this way to deal with short term project needs.
In recent years, employers have increasingly used contract employees. They were considered self-employed contractors. Unlike a full-time permanent employee, the contractor rather than the employer is responsible for providing benefits and paying income taxes.
Certain companies, most notably Microsoft, have recently had their contractor hiring practices challenged. Challengers maintain that people claiming to be self-employed contractors were in fact employees. That would require payment of payroll taxes plus back payments for vacation, holidays, and other benefits routinely provided to employees. To avoid such challenges, employers are increasingly hiring temporaries who work for employment agencies. These temps are employees of the temp agency and cannot be construed to be employees of the temp agency’s client.
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This glossary post was last updated: 28th November, 2021 | 0 Views.