Temporary Agencies vs. Workers Comp
Temporary agencies or temp agencies have long affected the WC rating system.
Another of the major concerns when I spoke at the NC Mid-State Safety Council quarterly meeting was temporary agencies.
The three main concerns I have with temp agencies are:
- In the past temporary agencies would open and close every three years to avoid an experience rating or E-Mod calculation. This harms the way the Workers Comp system is supposed to work. By not having an E-Mod besides 1.0, the temporary agencies that had a horrendous claims history paid no more than the safer ones.
- If the temps working for you do not have Workers Comp coverage due to the temp agency lapsing their policy, the TEMP EMPLOYEES WILL BE YOUR RESPONSIBILITY due to the ladder of insurance – see last post.
- You may not know the policy/cert has lapsed or had voids in coverage. There is no mechanism to inform you of the lapse.
Employers have unwittingly been on the hook for major claims, as the temps are now covered by their policy. One way to upset an insurance carrier is to have coverage for employees that were not counted in your payroll. Your company may likely face a cancellation in this situation.
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