Using Contract Skilled Labor Can Reduce Workers’ Compensation Risk—Here’s How

Employee safety is a top concern for builders not only looking to prevent injuries on the jobsite, but also workers’ compensation risk, something which, according to NAHB, can be avoided through employee staffing partnerships. A staffing arrangement places "temporary employees" with a "host employer" client, who, along with the staffing agency, is responsible for creating a safe work environment.

In the event of an injury, the staffing company incurs the cost of workers’ compensation insurance coverage for its temporary employees, and temporary worker injuries also should not affect a company's Experience Modification Rate (EMR).

Using a staffing company may help a host employer better manage their workers' compensation risk, as the staffing company is responsible for maintaining workers' compensation on its temporary workers. For example, a new project may require additional and/or specialized workers to meet project workload demands and customer deadlines. Instead of hiring these short-term, new workers who may potentially increase the host employer's workers' compensation exposure for the project, the company could mitigate its workers' compensation exposure utilizing temporary workers.

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