While we may not want to admit it, “recession” is the buzzword of the day. People across the country have had to do more with less, some have lost their jobs, and many companies are hesitant to hire new employees. Minnesota currently ranks 13th in the percentage of unemployed individuals at 7 percent. However, staffing companies appear to be a beacon of hope in the midst of economic crisis. Experts believe that increases in staffing employment are an indication of a rebounding economy.

For years, researchers have argued in favor of staffing firms and their ability to gauge economic vitality. Some go further to suggest that increases in staffing jobs are key indicators of an end to a recession. These times being some of the most difficult in recent memory, a favorable increase in staffing jobs can be seen as a light at the end of the tunnel. “A sustained upturn in temporary help employment would signal the end of the current recession,” note researchers on behalf of the American Staffing Association. ASA’s report further indicates that the economy would start to rebound within three months of a sustained upturn, based on statistical trends from the last three recessions.

The Bureau of Labor Statistics released welcome news earlier this month, reporting that for the period between December 2009 and January 2010, temporary employment increased by some 250,000 jobs. This increase in staffing employment makes last month the best January in over twenty years, according the BLS. Further, temporary employment has been on a steady increase since September 2009. This means companies are becoming more confident in the strength of the economy, have increased workloads, and are looking for temporary solutions to improve workflow.

Staffing firms to the rescue! Recent activity in quite a few economic sectors indicate that companies are seeking temporary workers to fulfill vital functions, notes John Henka, sales manager for Midwest Staffing. “Some of our largest clients really ramped up in January,” he said. “These companies are starting to see that we act as a buffer, allowing them to hire employees on a temporary basis with the option of becoming permanent.” John said that he has seen an increase in staffing requests in manufacturing and government sectors; the medical and food industries are also gaining considerable speed.

Whether all this spells an end to the deepest recession since the Great Depression is yet to be determined. “My hope is that the national upturn in staffing employment will have a ripple effect and a lasting impact,” said Jeff Merwin, business development specialist for Midwest Staffing. “Right now, I am planting seeds by telling clients how we can help them when things turn around.” If current trends in staffing employment continue to remain stable—and, hopefully, increase—the American economy may be well on its way to a full recovery.

Today’s companies are utilizing temporary employees more than ever before. As the number of companies utilizing a temporary workforce grows, so does the need to take a closer look at employment law in this area. The ideal way to avoid co-employment issues is to partner with an experienced staffing provider that has established policies to ensure compliance with employment laws.

What is Co-employment?

Co-employment arises in situations where two companies maintain control over an employee’s work. This typically occurs when companies utilize temporary or contingent employees as part of their workforce.

In most temporary staffing arrangements, the client is responsible for the day-to-day direction of the temporary employee, while the staffing company is responsible for all of the other employment aspects of the temporary employee’s assignment. Typically, a provider of staffing services:

1. Recruits, screens, interviews, hires, disciplines and terminates the temporary employee.
2. Maintains all necessary personnel and payroll records, including drug screens and background checks.
3. Computes wages and withholds applicable taxes.
4. Remits employee withholdings to and makes employer contributions for federal FICA and federal and state unemployment insurance payments.
5. Pays net wages directly to the temporary employee.
6. Provides Workers’ Compensation insurance coverage.
7. Resolves the temporary employee’s complaints and grievances.
8. At the request of the client, for any valid legal reason, removes the temporary employee assigned to the client.

How KeyStaff Helps Manage Co-employment

For the co-employment issues described above, we partner with our clients to ensure that each of us fulfills our role in the relationship with temporary employees. While client employees are regularly involved in the supervision of the actual work performed by our temporary employees, we take great care to ensure we maintain control of the employment relationship at all times. We accomplish this by adhering to a few best practices:

1. All aspects of the economic relationship with temporary employees (e.g. payroll, raises, bonuses, benefits) are administered by KeyStaff without client involvement. The client provides performance feedback to determine which temporary employees are eligible for bonuses but KeyStaff administers the programs.
2. All communications regarding the length or termination of employment are handled by KeyStaff without client involvement.
3. Employment-related issues that arise between temporary employees and client employees are promptly communicated by the client to KeyStaff staffing managers. This practice enables KeyStaff and the client to resolve these issues effectively.
4. We have implemented an open communication policy so that temporary employee issues are recognized early and addressed by KeyStaff staffing managers before they escalate.

By implementing the above practices, KeyStaff has been successful in avoiding co-employment issues with our clients. In addition, if issues should arise, we have the support of our experienced human resources and legal staff to advise and assist in these matters. We are committed to providing superior service to our clients in all aspects of our partnership, from properly managing co-employment risks to supplying a high quality workforce!

Temporary work or temporary employment has often been referred to as contractual, freelance, seasonal or simply as “temp” work. A common misconception can be that Temporary agencies offer positions, which are only temporary but in actuality also offer positions, which could lead to permanent placement. Temporary agencies work individually with companies and potential employees to find the most compatible pairing.

Benefits for companies working with Temp Agencies:

1. Confidence and Quality - All employees’ (temps) adhere to a thorough background check including an investigation into their criminal record. A “Temp” agency also examines the requirements and desires of a company to meet their expectations by providing a competent employee.
2. Economical - Companies, which need temporary employment to perhaps help complete a large project, or substitute for a permanent employee on a leave or vacation, do not need to pay all the benefits of a full time employee. In most cases, temporary employees receive an hourly wage and receive no insurance benefits; this of course is dependent on the longevity of the position and individual company policies. Once the job has been, fulfilled companies release the “temp” without the added expense of paying unemployment fees, which would be required by “laying off” a permanent employee.
3. Flexibility - Hiring a ‘Temp’ is an excellent way to find the right employee for an available position. If you are unhappy with the performance of a ‘Temp’ finding a replacement is a simple transition. Temporary agencies deal with the hiring, the placement and the paperwork.

Benefits for employees working with Temp Agencies:

1. Flexible Hours - Employees have the flexibility to choose when and where they work. Temporary agencies work with the potential employee to find a position that best fits their schedule. Full time or part time jobs are available in the daytime, evening, or even weekends and in some cases special holiday positions are available.
2. Pay Rate - The pay can be beneficial to temps because when employers are looking to fill positions quickly they are willing to pay the extra price. Health benefits may be available depending of the longevity of the position and contingent to company policies