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Would you like to add information to this article? Interested in writing or submitting an article? Have a question about this article? "Temporary Worker" Loopholes? 
Question
Forum Responses
From contributor J: You do not have to hire through a temp agency. You can hire a temp as a temp by telling them the position is for a certain time or a certain project only at which time the job automatically ends. They are essentially 1099 workers, but your accountant can advise as to the best procedure. The first respondent is correct in that temp workers will likely have little or no skill and will cost you plenty in mistakes made or poor productivity. From contributor L: As the questioner mentioned in his post, the purpose for hiring temps was to avoid rate hikes with his unemployment insurance. The Texas Workforce Commission governs employer/employee rights. They have tons of information available on their site, of which I have excerpted a piece here: "Employers and job seekers alike sometimes have questions about laws relating to temporary work. TWC offers the following information about seasonal staffing:
With that said, the only way to avoid unemployment taxes on an employee is to hire contract labor, use a temp agency, or use an employee leasing firm.
From contributor S: Hiring through a temp agency is very expensive - I've done it enough to know so. And you are getting an unskilled person that may be replaced by another one a few days later. I suggest hiring with a longer-than-normal probationary period. Normally it is 90 days, but you can make it whatever you want, as long it can be reasonably defended. 120, 150, or even 180 days would be reasonable. If someone asks why, just tell them you have been burned in the past and want to be cautious. From the original questioner: Thanks for all your posts. I need to clarify my question. I'm not trying to avoid withholding payroll taxes, but attempting to avoid paying higher than normal unemployment rates due to a former employee receiving unemployment benefits. If a former employee applies and receives benefits, the former employer is charged for these (essentially paying an employee he now does not get any work from), and I know local Home Depot/Lowes stores hire people under temp agreement, not through an agency, and I suspect this is their strategy. From contributor N: Contributor J is mistaken. The length of time that a person does work for you has nothing to do with reporting income on a 1099. It's highly unlikely that any temp that you hire to do work for you meets the rules that would qualify him as an independent contractor. I know what you are facing regarding avoiding higher unemployment rates because I have already fought that battle with the state - there's nothing you can do to avoid that problem. From contributor E: Temps should never be fired or let go. They should always quit. There are plenty of ways to go about helping this process. However, if you should find one that just won't quit no matter how bad you make the job, document everything. 1 minute late is a writeup. Within a few weeks you should have enough information to terminate with just cause. Check Texas state laws for when you can fire and not have a hit on your unemployment. Have you reviewed the related Knowledge Base areas below? 
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