Temporary and Contract Labor

RISK-MANAGEMENT STRATEGIES FOR EMPLOYERS THAT UTILIZE TEMPORARY AND CONTRACT LABOR

Check workers’ compensation coverage. A worker who is injured on your site who is not covered by workers’ compensation insurance, including a temporary worker or contractor, could sue you for negligence. Don’t hire contractors, especially for dangerous work, without asking to see their workers’ compensation coverage certificate. In your contract, you can ask to be indemnified in the event that their other employer loses coverage as a result of failure to pay premiums. Also, don’t just accept any certificate as valid: insurer fraud is common. You should verify through the insurer that the contractor has current coverage, and check that the insurer is listed with your state’s Department of Insurance.

Include safety in your job specs. Perform a risk assessment in the area where temporary or contract workers will be working, and make a list of all the hazards they may face. You may want to require them to have specific training and credentials.

Include safety in your prequalification process. Is safety part of your prequalification process for all contractors or temporary labor suppliers? It’s important to know if they carry adequate general insurance, but it’s also important to ask specific questions about their safety track record—including their lost workday injury and illness rate (LWDII) and workers’ compensation experience modification rate (EMR); their training and certifications, and copies of any written safety programs and procedures that you expect them to use in the course of the job they are providing workers to do.