Guide to Temporary Work Agreements
So, what is a temporary work agreement? In simple terms, it is an agreement between an employer and employee that defines the work conditions, rights and obligations for a fixed period of time. Above all, a temporary work agreement needs to be transparent and unambiguous, setting out the specific terms of employment as well as the expected standards of performance and behaviour. A well-written temporary employment agreement is a critical aspect of establishing expectations, as it can clarify difficult situations down the line in the event of a dispute.
In most cases, a temporary work agreement will be utilised when a business wants to employ an individual on a short-term basis. In other words, this type of employment is not intended to be ‘permanent’. For example, a business may enter into a temporary employment agreement when it wants to take on extra staff during peak periods, regardless of whether that means employing someone full-time or part-time . Similarly, if a member of staff is absent due to illness, maternity leave or sabbatical, a temporary work agreement may be used to hire a casual or part-time replacement for the interim period. Additionally, businesses may find that a temporary work arrangement is preferable when they want to assess an employee before committing to a permanent role.
In summary, there are three core reasons a business might enter into a temporary work agreement with an employee. They are:
- To cover peak periods or seasons. Doing so may help minimise the effect on day-to-day operations, whereas a permanent appointment would be unnecessary and more expensive.
- To cover for staff absences. This allows the business to maintain operational continuity without committing to a long-term hire.
- To evaluate a staff member’s capabilities. This provides a way for the business to assess a new employee against specific performance and personnel criteria before either promoting them or offering a permanent position.
The Basic Elements of a Temporary Work Contract
The temporary employee agreement should be written in clear, easy to understand language, and spell out the terms of the employment. It is vital that all aspects of the work agreed to be completed is included. When writing the agreement, keep in mind that, although you have a work to be done requiring the services of a temporary employee, you may have other work available and that the employee may satisfy that need as well. The agreement should be written so that confusion over what was agreed to is held to a minimum.
The following sections are examples of what to include in a temporary worker agreement:
Job Specifics: Describe the nature of the job the temporary employee will be performing. Include the employee’s supervisor, if applicable, and general work location if more than one exists at the place of business.
Time Period of Employment: Clearly state the time period for which the employee is being hired. Explain the options for extension of employment and any notification required for those extensions.
Salary or Wage: Cost of temporary employment should be discussed. This includes whether there is a one-time payment for the job being performed or whether the pay is broken down into an hourly wage.
Termination Clauses: Address the terms of termination. For example, who is responsible for the employee’s supervision at the workplace? Who will determine when the work is completed or the employee is let go? How much notice must be given to the employee before terminating employment?
Workplace Policies: If the temporary employee will have access to any other employees, audiences or the public, clearly explain the policies and procedures regarding confidentiality, customer service or other important issues. Explain whether the temporary employee will have access or the ability to use company property such as computers and telephones. If not, describe the procedure the employee should follow for any company related work they may do.
Important Legal Considerations for Employers
Legal Considerations for Employers: Businesses must be careful to fully comply with applicable labor laws regarding classifications and employment agreements. Failure to do so can lead to significant civil and criminal liability.
In addition to possible criminal penalties, employers can face hefty fines and even prison time for employing workers who are not legally authorized to work in the country. U.S. businesses are subject to inspection and audit by the Department of Labor, Immigration and Customs Enforcement ("ICE"), and other government agencies. ICE has increased the number of employer audits and inspections over the past few years and has issued fines in the millions of dollars to several large companies. The fines can be levied not only against the business, but also personally against corporate officers and other individuals.
Another common pitfall occurs at companies where temporary workers are permitted to use the computer systems. While the use of computers and IT resources is usually memorialized in an Acceptable Use Policy, if an employer does not have an Acceptable Use Policy, then the organization may potentially be exposing itself to liability when disclosing confidential information of customers, employees, or other business partners through temporary works’ use of computers and IT resources. Further, if the company’s IT systems have become infected with malware as a result of temporary worker activity, it could expose the company to liability if the malware was breached by unauthorized third parties.
How to Write Temporary Work Agreements
When drafting temporary work agreements, employers must clearly state the relevant details pertaining to each role. The agreement should also correspond with any larger agreements between the employer and the employee or their direct employer, depending on the situation. To facilitate this, employers may use a checklist when writing an agreement. The following is a guideline, but specific roles and industries may require additional considerations.
The agreement should clearly state the following: A sample Temporary Work Agreement is provided on our website . Before implementing any temporary work agreements, employers should first consult relevant laws to determine if the agreement is legally permissible. Many permanent employees of Australian firms are protected by award agreements, and these agreements can also be transcribed onto a temporary worker agreement. Employers would be wise to consult with legal counsel before implementing a temporary work agreement to ensure language is sufficiently strong so as to protect employer interests.
Sample Agreement Templates and Customization Advice
Accessing and Utilizing Sample Templates for Temporary Work Agreements
There are a host of sample temporary work agreements and engagement letters online. Unfortunately, most of these samples are transplants from foreign jurisdictions, and that means they may not have the relevant legal elements needed for your North American operations. Sometimes the samples themselves are limiting as they follow a boilerplate format, being silent on certain points or vague in their wording.
One strategy is to compile the "best of" sample documents into a master work agreement. You can then mix and match different clauses from multiple sources, or even draft your own material to create your perfect agreement. However, before you assemble your composite agreement, consider these tips:
Many large and small employers are happy to share their policies, handbooks, and other internal documents, especially if you are a Microsoft partner. You may be able to obtain a copy of their temporary work agreement through the local HR Network Group or HR Association. Exposing yourself to many sample documents increases your exposure to modern contract language and new approaches to releasing and liability.
When accessing a sample, ask yourself the following questions:
In short, read the samples with a discerning eye and fixate on the details. A single poorly worded clause can have a significant impact on your organization’s risk exposure.
Finally, many of the sample documents will come with footnotes or legal references that explain the element and provide practical examples. Pay attention to these notes—they are clues that can help influence your word choices and even your business practices.
Pros and Cons of Temporary Work Agreements
There are numerous benefits to creating a temporary employee work agreement. These lists are not exhaustive, but include some of the many reasons why a temporary work agreement is the best method to working with temporary employees.
Benefit to Employer
Ability to control responsibilities, including working hours, and afford the temporary employee limited (if any) employment rights under company policy.
Ability to immediately terminate the temporary employee without pay in lieu of notice or severance, except where otherwise provided by statute.
Avoid liability for overtime under the Employment Standards Act where a permanent employee would be entitled to such pay.
Benefit to Employee
Sleep and eat outside of working hours.
Determine whether they like the work for personal or financial reasons.
Work and earn the same pay as a permanent employee without the strings attached.
Build a resume or fill a gap in marketable skills that helps them find a permanent job eventually.
A potential drawback of using temporary employee agreements is that if the work is not for a short-term project and the company needs more work and/or cannot afford to have more than one temporary employee , it may be difficult to transition a temporary employee to permanent status. Some of the benefits listed above might keep some candidates from applying for the position at all and discourage those who might be interested in trying the work for a short time.
If the work is for a short time only, this is the end of the relationship with the temporary employee. However, if the work is for a long time but the company only needs one temporary employee, replacing the temporary employee with another temporary employee could be a problem for the company. For example, the company could be short-staffed, lose a potential customer to a competitor who has more staff and so on. It reduces productivity and affects morale.
And it can be costly to bring in the next temporary employee, especially if training is required.