In a contract engagement structured through a staffing or employment agency, who is technically the worker's employer of record?
Answer
The staffing agency
When a contract engagement is mediated by a staffing or employment agency, the worker is not directly employed by the company utilizing their services (the client). Instead, the staffing agency assumes the role of the employer of record. This means the agency handles the core employment functions, such as managing payroll processing, ensuring taxes are correctly withheld from the worker's pay, and frequently arranging access to certain benefits packages. The client company maintains a business relationship with the agency, paying the agency a fee, and the agency, in turn, pays the worker based on their contracted rate.
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