Liability for temporary employees
In most states, principles of common law, specifically the “dual employee” doctrine, addresses the issue of who is responsible for workers’ compensation coverage for temporary employees. The doctrine considers loaned, leased, or temporary workers as employees of both the labor service and the client company. If a worker is injured, workers’ compensation coverage can be provided by either company, depending on their contractual agreement, which must comply with state law.
With corporate downsizing, re-engineering and reorganization, your company might find itself in a position where the use of temporary employees makes good business sense. Some employers also use temporary employees to avoid the responsibility and costs of providing workers’ compensation and fringe benefits.
In such cases, as an employer, you can be left on the hook for temporary employees under your supervision.