What are temporary employees?

The business world is continually evolving, and agility can be the difference between success and failure.

Yet, if your business wants to grow rapidly or scale globally, your company needs top talent — ‌and often, it demands them immediately. This creates a challenge for HR professionals, who are tasked with finding the right people for urgent, short-term needs.

Enter the temporary employee.

But what exactly are temporary employees, and how are they different from contractors? 

In this article, we’ll explore these distinctions, uncover the benefits of hiring temporary talent, and break down your legal responsibilities to them. Plus, we’ll share best practices for hiring temps in an increasingly remote, global business environment.

What are temporary employees?

Anyone who’s employed on a short, fixed-term contract — whether they’re a full-time employee or only a part-time worker — is a temp worker. They could be an intern or seasonal worker, provide special skills, or be a stop-gap worker to give HR time to find a permanent employee.

Temporary employees are generally people a company hires to satisfy a short-term need. They might need to help with a project, for example, or cover for someone while they’re on a project. They could be a stand-in for an absent employee or for one going on a sabbatical or on special leave.

Contractor vs temporary employee: What’s the difference?

Although temp workers usually sign limited-term contracts, they’re not contractors in the true sense of the word. They’re generally employed for a limited time to help you meet short-term business needs, and they aren’t usually entitled to any benefits. Contractors also aren’t entitled to benefits, but that’s where the similarities end. A contractor is a person or business that offers special skills that you don't need often. They could be a freelancer, a consultant, or even a gig worker.

There’s one other big difference. As an employer, you must pay taxes for temporary employees, but you don’t need to do that with contractors. They’ll usually send an invoice for you to pay them, just like any other supplier.

Employer of Record & PEO —

29 min

Guide to hiring international employees

Learn how easy it can be to hire someone from another country, with tips on navigating HR compliance, managing payroll, and providing visas.

7 benefits of hiring temporary employees

There are many benefits to hiring temporary workers. Here are seven of the most important ones for a distributed workforce:

1. Rapid workforce scaling

Employing temporary people is a great tactic for scaling your workforce quickly. You might need to do this when demand is seasonal — for example, if you’re in the agriculture, hospitality, manufacturing, or retail fields. Temporary employment is also a way to staff up to handle a big new customer or project.

2. Fast-track hiring

Employing regular employees can take months — and for good reason. At the very least, you need to screen them, do background checks, validate their references, interview them (more than once), consult with internal shareholders, and then make a decision. 

Sometimes, you need someone to start immediately or within a few days. That’s when temps are a good solution, but be sure to include the right clauses in your contract.

3. Reduces pressure

Temp workers can also buy business owners time. The hiring process for a permanent staffer may be underway, and bringing in a temporary employee can pick up the slack. This not only relieves the pressure to hire quickly but may also give you another candidate for the position.

4. Try before you buy

Hiring someone in a temporary capacity is a good way to give a promising candidate a trial run. You could pitch it as a “working interview” that may result in an offer to stay. 

However, this approach carries risks. Your temp might be on their best behavior during this evaluation and then change dramatically once they become a permanent employee.

5. Fresh ideas and skills

You don’t always have to turn to expensive independent contractors for specialized skills. You might find what you need in a temp. 

Hiring temporary employees is a useful tactic for executing projects quickly or when their skills are only needed for a short period of time. Plus, some temporary staffing agencies specialize in finding candidates for highly skilled positions.

6. Manage payroll costs

Temporary employment can be a great way to control costs. Temps often accept fixed hourly rates and don’t receive benefits such as health insurance. And when they work remotely, the cost of employing them can be even lower. 

That said, it’s important to use a structured remote worker onboarding process, as this gets them going in their temporary roles as quickly as possible. 

7. Discover talent

The gig economy has changed the way we work. Because many people can work from anywhere, we can bring in talent from all corners of the world. That’s great for a remote-first, international business. It carries risks, too, but you can mitigate them if you bring in a co-employment partner.

What are an employer’s legal obligations to temporary workers?

If you run a business in the US and use temp employees from within the country, your legal obligations are much the same as they are for regular employees. 

Tax compliance is the big thing, but the key difference is with benefits. Federal law specifies that temps are only entitled to certain benefits after working 1,000 hours ‌a year.

It also matters where you are in the US, as some states impose additional responsibilities on employers of temps. In California, for example, there are at least four laws that may cause you legal issues. You must comply with the Family Medical Leave Act (FMLA), the California Family Rights Act (CFRA), the California Pregnancy Disability Leave Law (PDLL), and the California Paid Sick Leave Law (PSL).

Managing international temps

Recruiting temps from outside the US can be even more complicated, as you have to deal with employment laws and regulations in other countries. And if you need those workers to be onsite in the US, they need work visas.

Things are a bit less complicated for remote international temps. In that cse, you only need to comply with the tax, legal, and regulatory requirements of the countries where your remote workers live and work. But these do vary from country to country.

For example, if you’re looking to hire a remote employee in the Philippines, there are payroll deductions you’ll be required to make and pay over to that country’s government, including the following:

• Social security

• Income tax

• Philippine Health Insurance Corporation

• Home Development Mutual Fund

Other countries even specify temps’ working hours and forbid work on public holidays.

And all these different laws can change, usually when a new government comes in. You can see how globally employment can get complicated very quickly. 

Bringing in a partner to help

There are two ways to easily navigate all these complexities: you can outsource everything to a global HR hub or go the co-employment route. The first involves handing all HR tasks to specialists so that you can focus on growing your business and maintaining its productivity.

With co-employment, you have another two options — but the choice really depends on where your temp employees live. In some countries, you can appoint a professional employer organization (PEO), but in others, an employer of record (EOR) is a better option. 

With a PEO, the employee legally has two employers: one for the day-to-day and another that handles HR. An EOR relationship is similar, but it has to have an office in the country employing workers on your behalf.  You can read more about EORs vs PEOs here.

Global HR —

6 min

A fast, proactive hiring process builds nimble teams

Build nimble teams with a fast, proactive hiring process. Discover how streamlining recruitment, using EOR solutions, and focusing on agility can help companies attract top global talent. Learn why a swift, efficient hiring strategy sets the tone for a dynamic, results-driven workplace while ensuring compliance with international regulations.

Should you hire a temporary employee or contractor for your remote business’s needs?

We’ve established that temp workers are not the same as contractors. So, which should you choose for your remote-first international business?  The answer depends on your business, the specific roles you need to fill, and the needs of the people you hire.  For example, if you need someone to cover in an admin role, a temp would probably work well. But if highly specialized skills are required, you’re likely better off with a contractor.

Your needs may also be seasonal. As we pointed out earlier, certain industries do use seasonal workers. Availability can play a part if the skills you need are rare or in particularly high demand. Those skills may also be unaffordable in your go-to markets, so you may need to shop around a bit. But be careful here. When you’re looking to fill a permanent position, you have the luxury of time to thoroughly screen the prospect. And with an international contractor, you can do background checks and validate their references. You don’t have that luxury with temps. That said, you can mitigate the risks by following established remote-first recruiting practices.

Managing your workforce

It used to be that the only thing needed to manage the HR requirements of small- and medium-sized enterprises (SMEs) was a half-decent human resource information system (HRIS). Now, many businesses have workers who operate remotely either some or even all of the time, and technology has improved dramatically.

While an HRIS is great for streamlining your HR domestically, it can struggle when you hire remote international workers. The same is true for finding independent contractors. There’s an exponential increase in complexity as your organization grows.

Of course, you can avoid all of this by simply going to a temporary staffing agency. The temp agency handles payroll, deductions, benefits, etc., and bills you for that. And that’s great for a simple admin role.  But for more highly skilled temporary workers, you may have to get your hands dirty.

This brings us back to the idea of a global HR hub like Remote, which can easily helps you hire, manage, and pay your entire team, wherever they may be in the world, all from a single place.

Hire top talent easily with Remote

Whether you’re hiring temporary or contract workers at home or abroad, you need a solution that helps you comply with labor laws and regulatory requirements in the countries your remote workers call home. While you could do it all alone, bringing in a partner gives you access to a much deeper skill set and a wider knowledge base.

Remote is that partner. Our comprehensive global HR services enable you to hire talent worldwide while delivering an exceptional experience for your team. With local experts handling all the complex legal, tax, and payroll details in each country, you can concentrate fully on growing your business. If you need an HR solution without borders, contact one of our friendly experts today to find out how we can help you.

Hire and pay your global team with maximum speed and safety

Start onboarding employees and contractors in minutes with Remote, G2’s top-ranked multi-country payroll software.

Get started nowSchedule a demo