Temporary Workers
Workers furnished to the insured by a temporary staffing agency for short-term assignments, whose workers comp coverage must be clearly assigned.
What It Is
Temporary workers are individuals furnished to an employer by a temporary staffing agency for short-term, project-based, or seasonal assignments. Unlike leased workers who are provided on a long-term basis, temporary workers are typically assigned for specific durations — a few days to several months.
The workers compensation responsibility for temporary workers typically lies with the staffing agency, which is the legal employer. The staffing agency's workers comp policy covers injuries to temporary workers while they are on assignment at the client company's location.
However, the client company may still face exposure. If the temporary worker is deemed a statutory employee of the client company, the client's workers comp could be triggered. The Alternate Employer Endorsement on the staffing agency's policy helps address this by naming the client company and ensuring the staffing agency's policy responds first.
Why It Matters for Brokers
Many commercial clients use temporary workers, especially in manufacturing, warehousing, and construction. Brokers must ensure that the staffing agency carries adequate workers comp coverage and that the client company is protected through an Alternate Employer Endorsement or similar mechanism. Without clear coverage assignment, a workplace injury to a temporary worker can trigger disputes between the staffing agency's and client company's workers comp carriers.
Real-World Example
A warehouse operation brings in 8 temporary workers from a staffing agency during the holiday season. One temp worker is injured operating a forklift, generating $125,000 in workers comp claims. The staffing agency's workers comp policy covers the claim because the temp is the staffing agency's employee. The client company's workers comp policy is not triggered because the staffing contract clearly assigns WC responsibility to the agency, and the agency has an Alternate Employer Endorsement naming the client. Without this structure, the client company's workers comp could have been triggered, increasing their EMR.
Common Mistakes
- 1Not requiring the staffing agency to provide a certificate of insurance showing workers comp coverage before temporary workers begin assignments.
- 2Not requesting an Alternate Employer Endorsement from the staffing agency's broker, leaving the client company exposed to statutory employer claims.
- 3Failing to include temporary worker payroll in the staffing agency's workers comp premium calculation, creating audit exposure.
How brokerageaudit.com Handles This
COI Manager tracks staffing agency certificates, verifying workers comp coverage and Alternate Employer Endorsements before temporary workers are deployed. Policy Checker reviews client company workers comp policies for temporary worker exclusions and flags accounts that use staffing agencies without documented coverage. Submission Intake captures temporary worker usage in the workers comp questionnaire to ensure proper underwriting.