How to hire temporary employees – a step-by-step guide

Hiring temporary employees can help businesses fill staffing gaps, especially during busy seasonal periods, and can enable you to bring in specialist skills.

But how do you hire temporary employees? And what’s the legal position?

The benefits of hiring temporary employees

You might require temporary employees for a number of reasons. There are several benefits to hiring temporary employees:

  • Temporary hires help you to fill positions for specialist staff, for example for individual projects
  • Many businesses value the flexibility provided by temps
  • Temporary employees can often be hired quickly, and can help to plug immediate gaps in your staffing
  • It doesn’t have to be temporary – if you find the right person who you want to keep hold of, you’ll often have the option to take on the employee permanently

How to hire temporary employees

If you’re considering hiring temporary employees, first it’s crucial that you’re aware of the legal position. There are specific rules regarding fixed-term and agency workers, and it’s important that you abide by them.

Fixed-term contracts

Fixed-term contracts are one of the two main ways of hiring temporary employees. An employee is on a fixed-term contract if they have a contract of employment, and if it ends either on a specific date or on the date of completion of a specific task or project.

Maternity cover is often conducted under a fixed-term contract, along with specialist employees required for individual projects, and some seasonal or casual employees.

Agency workers

You may choose to hire temporary staff through a temporary work agency. This is particularly common in retail and hospitality businesses. If you’re hiring agency workers, you need to be aware of their rights under the Agency Worker Regulations.

First, all agency workers are classed as ‘workers’, rather than employees. They are still entitled to things like paid annual leave, rest breaks, and the National Minimum Wage, along with standard health and safety at work, and protection from unlawful wage deductions and discrimination as set out in the Equality Act 2010.

Once an agency worker reaches 12 continuous weeks in a given job, they become entitled to the same treatment as comparable employees. That is, they must be treated the same as if they’d been hired directly. This includes pay (as well as bonuses and commission), and working time rights such as paid leave in addition to those guaranteed by law.

Choosing a hiring route

Next, you need to choose whether you will hire your temporary staff directly, through a recruitment agency, or through a temp agency. You’ll find some useful information on the first two options in our guide to the financial implications of hiring extra staff.

However, it’s important to note that temp agencies operate in a different way. This is a popular way of hiring temporary staff, but you should make sure that you understand it before you jump in.

How do temp agencies work?

If you’re considering hiring through an agency, it pays to know how the system works. In the UK, the cost of hiring through an agency falls on the employer – the worker does not bear the charge. In most temp agencies, the worker will be paid by the agency, which will also be responsible for tax and NI.

The amount you pay the agency will vary not only by agency but also significantly by sector and industry.

If you decide to take on an agency worker as a permanent member of staff, you are likely to be charged a ‘transfer fee’ by the agency. There are some exceptions to this, for example if a certain period has expired between the agency assignment being completed and the worker being hired as an employee.

It’s generally best to speak to a range of different agencies in your field before making a choice. You should feel that you trust the agency you choose, and that they understand your business and its needs.

Temporary employee insurance requirements

If you employ people, even on a temporary or casual basis, you’re legally obliged to take out employers’ liability insurance. This protects you against compensation claims arising from illness or injury suffered by an employee during the course of their work. If you fail to take out employers’ liability insurance when you need to, you stand to be fined up to £2,500 per day that you are uninsured.

Simply Business offers insurance tailored to temporary workers. Click to compare employers’ liability insurance quotes.

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