By Danek S. Kaus H iring temporary workers can save time and money, but it can also be the fast track to legal problems if you don't know, or follow, the rules. The law allows a company to bring in contingent workers for a specific project and then release them when it's finished. However, temporary workers and those who qualify as independent contractors frequently command a higher hourly rate. On the company's side, it does not have to pay sick leave, vacation time or other benefits, such as health care, to temporary staff.
Typical ICs provide their own insurance.
Temporary workers are hired through an agency that, for a fee, pays them and deducts the appropriate taxes. Often the agency is also the matchmaker between client and worker, taking a fee for this service, as well. Although the client company does not offer the worker benefits, the agency might. One of the common practices in the high-tech industry is to bring in temporary workers for long periods. Hilton says many companies also use permanent temps as a way of making the books look better because the company is able to show fewer permanent employees, avoid paying fringe benefits, and possibly avoid potential discrimination issues.