Hiring the right talent while navigating the complexities of employment laws and workplace safety can be a challenge for any business. Whether you’re a small business owner or managing HR for a large corporation, employment risks present a significant concern. From compliance with labor laws to the liabilities associated with hiring, these risks can affect your company’s bottom line and reputation. While some risks are eliminated if you partner with a staffing agency for workforce management, you are functioning as a co-employer, so certain responsibilities do fall into your hands.

If you want to mitigate your remaining risks, here are some critical points to consider:

1. Classification

Misclassifying a worker as an independent contractor can come with serious penalties. Many companies misunderstand the rules surrounding the independent contractor classification, particularly when it comes to how much control a business can exert over how an independent contractor manages their duties. If you categorize any workers as independent contractors, knowing the regulations surrounding the classification is a must. Additionally, working with a third-party compliance vendor can be a smart move, ensuring all contingent workers are reviewed to confirm they are properly classified.

2. Co-Employment

Working with a staffing firm can lead to a somewhat unique situation called co-employment. Both you and the staffing agency have a degree of control over the worker, and you also share some of the responsibilities and liabilities associated with serving as an employer. In order to mitigate co-employment risk, you both need to create formal agreements regarding the nature of the worker’s assignment. Similarly, defining responsibilities and ensuring compliance with federal and local regulations need to be thoroughly addressed. For example, making sure all contracts clearly state the staffing agency is responsible for wages, taxes, workers’ compensation and similar costs is a must. Additionally, understanding how to initiate disciplinary action through your staffing agency is critical. Staffing agencies are extremely knowledgeable about this arrangement, so they can guide you in the right direction.

3. Intellectual Property and Company Assets

Any worker who comes into your environment has access to certain amounts of intellectual property and assets. Everything from information in your databases to physical items needs to be properly protected to reduce the chance of theft or damage. Typically, implementing a thorough on- and off-boarding process for all employees, including your contingent workers, can help mitigate any associated risk in these areas. That way, you can ensure access is granted and removed at the proper time, and that any loaned equipment is properly accounted for at the right times. For example, ensuring all workers return badges on their last day may require a formal turn-in and documentation process. Similarly, altering network access when someone starts, changes roles, or leaves is another critical step.

How Staffing Agencies Mitigate Risks

 

1. Pre-Screened Candidates

Hiring new employees comes with inherent risks. If an employee is underqualified, misaligned with your company culture, or unable to meet expectations, it can result in lost productivity, higher turnover, and even legal disputes. Staffing agencies mitigate this risk by thoroughly vetting candidates before they are placed. Their pre-screening processes include background checks, skills assessments, and integrity assessments. This means the candidates you receive are qualified and ready for the job. Many agencies also offer temp-to-hire or payroll options, allowing you to evaluate a candidate’s performance and fit within your team before committing to a long-term hire. This arrangement reduces the risk of turnover and ensures you’re building a stronger, more cohesive workforce.

2. Streamling Benefits and Payroll

Employment risks aren’t limited to hiring; they extend to managing payroll and benefits. Mistakes in paycheck calculations, tax withholdings, or benefit administration can lead to costly compliance violations and employee dissatisfaction. Staffing agencies remove this burden by handling payroll processing, tax filings, and benefits for contracted employees. This ensures accurate, on-time payments and adherence to all payroll regulations. Small businesses, in particular, benefit from this expertise, as it minimizes administrative stress while preventing errors that could otherwise expose them to penalties.

3. Enhanced Workplace Safety Protocols

Safety is a critical component of employment risk management, particularly in industries like manufacturing and warehousing. An unsafe workplace can lead to injuries, fines, worker’s compensation claims, and disruptions in operations. Many staffing agencies prioritize safety training and compliance for their workers. They ensure that candidates understand the importance of workplace safety before stepping into their roles. Some agencies even perform on-site safety inspections to confirm that their workers are entering compliant environments. By focusing on safety from the outset, both the agency and your business benefit from reduced risk of accidents.

Taking the Next Step

If you’re ready to safeguard your business against employment risks, reach out to our team today. Our expertise can help you focus on growth and success, while we handle the complexities of compliance, payroll, and workforce management. Your next qualified, safety-verified, and ready-to-work candidate could be just a call away. View our services to learn more.