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How do I handle temps on my Workers' Compensation policy?

Q: How do I handle temps on my Workers' Compensation policy?

A: When your retail business hires temporary workers through a staffing agency, you may need to add them to your Workers' Compensation Insurance.

In most states, employers are legally required to have Workers' Comp for their employees. But temporary workers actually have two employers: your business and the staffing agency. Which one provides Workers' Compensation for the temp? There's no hard and fast rule. You'll have to work it out case by case.

Many staffing agencies offer Workers' Comp to their temps, but others don't. You'll have to check the language in your contract with the staffing agency or coordinate with the agency to see who should cover the employee.

Here's why it matters: If a temporary employee is injured on the job and you don't have Workers' Comp, the employee could sue you over their injuries. Workers' Comp does two things for you as an employer:

  • This coverage may pay for the employee's lost income and medical expenses.
  • By fulfilling your state legal requirements for Workers' Comp, you can actually be protected from lawsuits. If you have Workers' Comp, your employees might not be able to sue you over workplace injuries.

What about seasonal workers?

Let's say you run a clothing boutique and need seasonal employees for the holiday shopping season. You hire them on your own, not through a staffing agency. Do you need Workers' Comp for them? As the Small Business Association reports, seasonal employees need to be covered under Workers' Comp, just like regular employees.

How do you make sure your retail business is in compliance with Workers' Comp laws?

You can check out Insureon's state-by-state guide to Workers' Comp laws. It's also a good idea to talk with an insurance agent who knows that retail industry.

How do you add temp staff to your Workers' Comp?

You'll have to contact your insurance agent, but the process should be simple. You'll add the temporary staff as "additional insureds," and you'll be able to print out a new insurance certificate that shows your new staff is now covered.

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