A temporary staffing agency acts as an intermediary, recruiting and placing its employees to work at various client companies for limited periods. This arrangement establishes a three-way relationship: the worker is legally an employee of the staffing agency, which manages payroll, taxes, and often benefits. The worker performs duties and receives day-to-day supervision from the client company, which acts as the secondary employer. This model offers organizations flexibility in managing workforce needs without the commitment of a direct hire.
Defining Different Assignment Types
Assignments are typically categorized by their intended purpose and duration. Short-term or project-based roles cover specific, finite tasks, often lasting a few weeks up to three months. These placements address immediate needs like special initiatives or unexpected workload spikes.
Medium-term assignments are frequently seasonal in nature, supporting businesses during predictable periods of high demand, such as the holiday retail season or agricultural harvest. These roles often last six months or less and may be recurring in subsequent years. Extended contract roles are generally for a longer duration, sometimes lasting nine months to a year.
Client-Driven Limits on Assignment Duration
The maximum time a worker can remain on assignment is primarily dictated by the client company’s internal policies, which are often established to mitigate legal and financial exposures. The main concern is co-employment risk, where both the staffing agency and the client are considered legal employers. As a temporary worker’s tenure lengthens, especially beyond six months to a year, the client’s level of control may increase, blurring the legal distinction between a contingent worker and a direct employee.
If a temporary worker is deemed to be functioning essentially as a long-term employee, the client company risks claims for back wages, benefits, and other employment liabilities. Large organizations are motivated to enforce time limits due to the requirements of the Affordable Care Act (ACA). The ACA requires Applicable Large Employers (ALEs) to offer health coverage to employees who average 30 or more hours per week.
By limiting an assignment’s duration, or by enforcing a “break in service,” the client aims to prevent the worker from triggering ACA eligibility or other employment rights tied to tenure. Some clients may also impose limits, such as 1,000 hours per year, to reduce exposure to litigation concerning intellectual property access or discrimination claims.
The Path to Permanent Employment
Many temporary assignments are structured under a “temp-to-hire” model, serving as a working interview for both the worker and the client. This arrangement specifies a probationary period during which the worker is evaluated for performance, cultural fit, and attendance. Common evaluation periods range from 90 days to six months, or a specific number of hours, such as 520 to 720 hours.
Once the client decides to convert the temporary worker to a permanent employee, the staffing agency is typically due a conversion fee. This fee compensates the agency for its recruiting and administrative services during the temporary period. The amount of the fee is often a percentage of the worker’s first-year salary, commonly falling between 10 and 20 percent.
The agency’s contract with the client usually specifies a conversion timeline, after which the fee is significantly reduced or waived entirely. This structure formalizes the transition, offering a transparent path to full-time employment for the worker.
Working Multiple Assignments Indefinitely
A worker can technically remain a temporary employee indefinitely by moving from one assignment to the next under the umbrella of the staffing agency. Since the agency is the continuous legal employer, the worker’s employment status is maintained even as client placements change. This perpetual career path is dependent on a strong, continuous working relationship with the agency.
The agency acts as a career manager, actively seeking out the next placement as the current assignment approaches its end date. A worker’s performance reviews from client companies and their flexibility in accepting different types of roles are primary factors in their continuous placement success. Market demand for the worker’s specific skills also plays a significant role in minimizing the gaps between assignments.
Understanding Benefits and Worker Protections
The staffing agency, as the official W-2 employer, is responsible for providing worker protections and benefits. This includes paying all necessary payroll taxes, which distinguishes temporary employees from independent contractors. Temporary workers are covered by the agency’s workers’ compensation and unemployment insurance programs.
The provision of health benefits is governed by the ACA, which requires large employers to offer coverage to full-time employees averaging 30 or more hours per week. If a temporary worker meets this threshold, the staffing agency is required to offer health insurance, often after a standard 90-day waiting period. Other benefits, such as paid time off (PTO) or paid sick leave, are determined by the agency’s policies and state regulations.