No matter what industry you work in, chances are at some point you’re going to hear someone use jargon in conversation that you’re not familiar with. When it comes to staffing this is absolutely true. Exhibit A: employer of record.

What Does An Employer Of Record Do?

When you work for a staffing company or temp agency, you are working for that company even though you’re contracted to work for someone else. Therefore, for tax purposes, the staffing company is your “employer of record”. The employer of record handles almost all of the HR functions such as contracts, payroll, tax deposits and filings, and other personnel paperwork. Unemployment insurance and workers’ compensation are also handled by the employer of record. If necessary, the employer of record also manages benefits, disputes, drug screenings, background checks, and hiring/firing of employees.

Why Is Employer Of Record Important In Staffing?

There’s a lot of crossover in the vocabulary used by human resources, recruiters, and staffing professionals. That being said “employer of record” really only ever comes up when working with a temp agency or staffing company. This is because staffing agencies hire candidates with the purpose of contracting them out to other companies. So while you’re working for Corporation A, you’re actually employed by Temp Agency X. 

This distinction matters most when it comes to your benefits, taxes, and pay. Although your day-to-day responsibilities may not change, understanding who your employer of record ensures you know where to go for payroll questions, HR support, and employment documentation.

Employer Of Record And The Growing Gig Economy

As staffing and the gig economy expand, the term “employer of record” is becoming increasingly common. Several major staffing companies have developed apps to improve user experiences for both clients and candidates.

One significant development in this area is Uber’s launch of Uber Works, which connects job seekers with jobs posted by staffing companies. Although similar in function to apps produced by staffing agencies, Uber’s brand recognition and extensive reach give it a distinct edge. This trend is likely to continue as companies leverage technology to enhance efficiency and improve the candidate experience.

Ready to navigate the world of staffing with confidence? Premier Talent Partners has you covered. Let us help you find your perfect fit—contact us today and experience staffing done differently!