Working with Temporary and Contract Employees

Temporary workers, contract workers, consultants, freelancers, seasonal workers and interns have two things in common. One, they are temporary workers and not part of a company's permanent workforce. Two, they are becoming more important and visible in today's economy.

There are three basic types. Interns are usually students looking for real life experience to supplement their studies. Contract workers—independent contractors who could be consultants or freelancers—are in business for themselves. Temporary employees are just that—employees of yours or of a temp agency. All three workers offer temporary help, but how you deal with each sometimes differs.

Here's a look at your temporary choices, where you can find them and other issues to consider:

Temporary Workers

Agencies have become the go-to place to find qualified temporary workers, so it's important to hire the right agency. Many agencies specialize in a particular industry or area of expertise, such as in financial services or technology. They may call their employees freelance instead of temps. But all should screen their applicants thoroughly, eliminating the tasks your company would take on if you hired short-term help on your own.

When interviewing these agencies, ask for references from peer companies that use the types of temps you need. Make sure the agency carries liability and workers' compensation insurance to protect your company against claims by a temp—they're covered, just like any employee. Also ask how agencies recruit their candidates. Some of the best come by way of trade associations, where you might find temps on your own.

If you choose to hire a temporary employee on your own, understand you'll need to screen candidates yourself. The cost of finding and vetting qualified candidates may consume any savings you might achieve by hiring them directly.

Still game? Look for temporary workers where you find permanent employees:

1. Online job sites, including indeed.com, careerbuilder.com and monster.com.

2. Industry-specific job sites, including mediabistro.com (for creative and media) and dice.com (for technology).

3. Social media sites, including linkedin.com.

4. Newspapers and association/industry publications

5. Job postings on your company website.

Contract Workers

While you might hire temps through an agency, you hire contract workers on your own. Evaluate contract workers—a freelancer, consultant or other individual—the same way you would any potential employee. Find them the same way, too, through online jobsites, social media, associations and referrals.

For legal and tax reasons, you cannot exert the same influence over the time of contract workers as you would with temporary employees. According to the Small Business Administration, independent contractors operate under a business name, invoice for work completed, usually set their own hours and typically have other clients.

Once you find the right contract worker, do not let federal employment law trip you up. The difference between a contract worker and an employee depends on how much control you have over the contractor. Also be sure to take other legal precautions as appropriate, such as getting signed confidentiality and (sometimes) non-compete agreements.

Interns

Increasingly, colleges and universities are making hands-on internships an integral part of students' education. Remember, interns are there to learn. Companies viewing interns as free labor can run afoul of the Fair Labor Standards Act. Interns can't displace regular employees. And, in most cases, you must pay them at least minimum wage and overtime if they temporarily supplement your workforce.