When a staffing agency places a worker at your site, the paperwork splits in ways that are not always obvious. The worker takes direction from your supervisor, wears your safety gear, and clocks in at your facility, but they are not on your payroll. So who is responsible for what?
Here is how the responsibilities usually divide in a standard staffing arrangement, and the places where they overlap.
The agency is the employer of record
For temporary and temp-to-hire placements, the staffing agency is normally the worker’s legal employer. That carries a specific set of duties:
- Payroll. The agency pays the worker, withholds and remits federal payroll taxes, and issues the W-2 at year end.
- Form I-9. The agency completes employment eligibility verification for its own employees. You do not complete a separate I-9 for a worker on assignment from an agency.
- Workers’ compensation. The agency carries coverage for the workers it assigns, so an injury on assignment is generally handled through the agency’s policy rather than yours.
- Unemployment. Because the agency is the employer of record, unemployment claims from an ended assignment go against the agency’s account, not yours.
This is a large part of why employers use staffing in the first place. The administrative load of hiring stays with the agency while the work gets done on your floor.
You still own the worksite
The part employers most often misread is safety. Being the employer of record does not move worksite responsibility off the host company. OSHA is explicit that a staffing agency and a host employer share responsibility for the safety and health of temporary workers, and it expects both to take that seriously.
In practice, the split usually looks like this. The agency handles general safety awareness and confirms the worker is suited to the assignment. You handle the things only you can: site-specific hazard training, machine-specific instruction, and the day-to-day supervision that keeps the work safe.
Injury recordkeeping follows the same logic. Under OSHA’s recordkeeping rule, the employer that supervises a temporary worker on a day-to-day basis is generally the one that records a recordable injury on its own log. For a worker on assignment at your facility, that is usually you.
Payroll transfers to the agency. Worksite safety does not.
Joint employment is a real possibility
Depending on how much control you exercise over a worker, you may be treated as a joint employer alongside the agency. When that applies, obligations under wage and hour rules and anti-discrimination laws can reach your company as well, even though the worker is on the agency’s payroll.
The practical takeaway is not to avoid supervising the worker. It is to apply your normal standards to them. Harassment policies, accommodation requests, timekeeping accuracy, and break rules should work the same way for an assigned worker as for anyone else in the building.
What to confirm before the first placement
- A current certificate of insurance, including workers’ compensation coverage and limits
- Who to call when a worker is injured, and in what order
- How hours are reported and approved, and the deadline each week
- What screening the agency performs before a worker is assigned
- The conversion terms if you decide to bring the worker onto your payroll
Get those five answers in writing at the start and most of the friction in a staffing relationship disappears.
This article describes how staffing arrangements typically work and is general information, not legal advice. The specifics for your company depend on your service agreement and your circumstances, so review both with your own counsel.
Talk it through with us
R&H Staffing Services has handled payroll, screening, and workforce coordination for Texas employers for more than three decades. If you want a plain walkthrough of how a placement would work at your facility, see our employer staffing solutions, call (956) 712-8367, or send a note through our contact page.