Legal Issues With Providing WC for a Staffing Agency

Employee injuries at work are covered by worker's compensation insurance.

Worker's compensation coverage ensures employees have access to medical treatment if they are injured while on the job. Temporary staffing agencies or temp agencies are no exception.

Applicable Laws

Temp agencies are subject to federal and state laws that address employer obligations for providing and paying for worker's compensation coverage. These requirements include providing related benefits, medical coverage, rehabilitation such as physical therapy and other treatments, and addressing the effects of diseases caused by work.

Temporary Agency Coverage

As an employer of multiple workers, temp agencies are required to pay for, and maintain, insurance for worker's compensation. However, when an employee is loaned to a contractor, state laws differ on who should cover the workplace injury. Employees get treated, but who is responsible for payment varies.

Criteria for Coverage

Temp agencies must abide by the same criteria as other employers when a worker is injured. The eligibility test involves three factors: worker's compensation is paid for via a policy, the person injured is an employee of the agency and the injury was work-related. If met, the employee must receive treatment.

References

• Insurance and Financial Advisor: Owner of N.Y. Temp Agency Accused of $25 Million Workers' Comp Fraud
• State of Illinois -- Dept. of Labor: Day and Temporary Labor Services Act Wall Notice
• Nolo Press: Are You Eligible for Workers' Compensation Benefits?

Resources

• U.S. Federal Government -- Business.gov: Workers' Compensation
• Nolo Press: California's Workers Comp