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Temporary Help

The principal business of temporary help agencies is to fill positions on a short-term basis. They employ people who want to work either limited hours or for limited periods. Companies that need part-time or full-time help for only a finite period can use a temp agency to avoid the hassles, mainly government-imposed, associated with hiring and subsequently laying off someone.

Additionally, some businesses use temp agencies for selective employee outsourcing. That is, they keep "temporary" employees on board for extended periods, sometimes for several years. These employees are often referred to as "permanent temps."

The main advantage with such an arrangement is greater flexibility to reduce staff or to release an unsatisfactory worker. The main cost is that temp agencies charge their clients a hefty premium over the actual amount actually paid to the worker, often in the neighborhood of 50%. This premium covers employer-paid payroll taxes, employee benefits, administrative overhead, and a profit margin.

Another way to utilize part-time or temporary help is to treat them as independent contractors. They are not employees on your payroll, but you pay them an agreed-upon hourly, daily or weekly sum. They are responsible for their own benefits, and for the full amount of payroll tax (Social Security, Medicare, etc.). You are generally not responsible for tax withholding, but you must provide them with a Form 1099 at the end of the year.

Before attempting to utilize any of these staff management strategies, consult with your legal and tax advisers. In some cases, "temporary" employees might be deemed to be de facto employees of yours by government agencies, especially if they are on board for an extended period. Likewise, "independent contractors"

also may be declared de facto employees if you are their sole, or even primary, source of income for an extended period. In this case, all the benefits you sought to obtain would be undone, perhaps at extra expense to you.
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