permatemp is a temporary employee Who works for an extended period for a single customer staffing. The word is a portmanteau of the words permanent and temporary .

There are two types of permatemp employment relationships. In the first form, a public or private employment hires employees as “temporary” or “seasonal” employees, but retain them, often full-time for year after year, often with less pay and without any benefits. These employees have the same duties as permanent employees, but without the same pay, benefits, and labor rights . The second kind of permatemp is an employee of a staffing services provider, payroll agency or Professional Employer Organization, qui Sends workers to work in long-term, on-Site position for a private company or public use. The employee is paid by the employment agency.

In the United States thesis agencies are required by the US Internal Revenue Service (IRS) to pay the employed portion of Social Security and Medicare taxes (FICA) and Federal Unemployment Tax (FUTA) in according with IRS Publication 15A. US leasing organisms sont également required to Provide employees with health coverage by the United States Department of Labor , the requirements of the health care offert will change in 2014 to comply with the Affordable Care Act ( ObamaCare ). Long-term full-time leased employees in the US may also be offered a retirement benefit with a minimum of 10%, IRS Form7003.


Traditionally, a temporary employee is hired to substitute for an employee who is on leave or vacation or to staff a project for which there are insufficient permanent employees to carry out the task. A seasonal employee is hired for the limited time because the work is only necessary for a certain part or season of the year. The normal practice of temporary employment for an agency is one in which the employees have a close relationship with the agency from which they receive their pay. Their work May ranks from day labor to high-priced consulting . The employee may work for one or several companies, and the working periods may be irregularly.

“Permatemps” are often distinguished from temporary employees by the same company for a long, possibly indefinite amount of time, working the same schedules and hours of regular employees, and by requiring “company” training or required attendance at “company “Meetings. This is where many Leasing Agencies in the US run afoul of the IRS and the US Department of Labor. The IRS, in an effort to close loop holes, which allow employees to hire temporary employees. The IRS definition of a common law employee. IRS Publication 15A explains ” Under Common Law Rules, you will be able to find the right services for you. IRS 15A also defines the role of staffing services with “The staffing department has the right to control and direct the worker’s services for the client, including the right to discharge or reassign the worker. “The Staffing Service for the Employees of the Employer”. (IRS PUB 15 Circular E) and civil penalties in the case of Vizcaino v Microsoft. Furthermore, if a “permatemp” is a qualifying standard for regular employees, IRS Publication 15B. IRS Publication 7003 goes so far as to say “An individual who is a common law employee of the receptacle (the worksite company) will not become an employee of another entity merely because the recipient enters into a formal” leasing agreement “with another entity . ” They are entitled to the benefit of their employees’ co-workers. IRS Publication 7003 goes so far as to say “An individual who is a common law employee of the receptacle (the worksite company) will not become an employee of another entity merely because the recipient enters into a formal” leasing agreement “with another entity . ” They are entitled to the benefit of their employees’ co-workers. IRS Publication 7003 goes so far as to say “An individual who is a common law employee of the receptacle (the worksite company) will not become an employee of another entity merely because the recipient enters into a formal” leasing agreement “with another entity . ”

Regular, permanent employees work for a single employer and are paid directly by that employer. In addition to their wages , they may receive benefits, such as subsidized health care , paid vacations , holidays, sick time, or contributions to a retirement plan . Regular employees are eligible to switch jobs positions within their companies. Even when employment is ” at will ,” regular employees of wide outfits are sometimes protected from abrupt job termination by severance policies, like advance notice in case of layoffs , or formal discipline procedures. They may be eligible to join a union, and may enjoy both social and financial benefits of their employment.

In order to pay the employee, the staffing firm is paid by the worksite company.

Legal issues in the United States

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Arguments have been made that a worker is a full-time employee, a person who is employed by a person who is not a member of the public service. While it is unknown how common this kind of position is, class action lawsuits-have-been Decided contre Seattle , Washington and King County, Washington . These public sector employees shall not be subject to the same limitations.

Two California boxes address the issues of public employees who were improperly considered “temporary” when they were actually employed as regular, permanent employees. The first case involves the Los Angeles County Fire Department ; The second such case concerning the employment practices of the Metropolitan Water District of Southern California . These boxes are both class action lawsuits that have been litigated over a number of years. Both cases are near, or in the process of, being settled.

In an Albuquerque , New Mexico , case citation needed ] a federal district judge ruled that an employee who worked full-time for the City of Albuquerque for more than ten years as a “seasonal” supervisor and recreation leader (never earning more than $ 7.00 Per hour and with no benefits) could have had a “property interest” in his employment so that he could not be terminated without a hearing. The judge also certifies a conditional class of “similarly situated” city employees employed as temporary or seasonal employees in violation of City ordinances, which limited temporary employees to two years and limited each year.

Staffing through temporary agencies in Silicon Valley technology companies. Permatemping in the vogue simultaneously with the economic bubble of the 1990s. Most recently, General Motors and its subsidiary, Delphi , announced plans to rely on temporary employees. Whether these will be long-term time, or permatemps, remains to be seen.

General Motors has used “permatemps” for a long time in its lowest level management, Level 6 Supervisor, under a national contract with Kelly Services .

One legal issue and one tax issue, both, HAVING to do with permatemps at Microsoft , defined aussi permatemping and changed it.

Vizcaino v. Microsoft 

In 1996, a class action lawsuit was brought against the company and had employees who had been classified as temporary and freelance . The monetary value of the following: how much Was Determined by the misclassified employees Could Have Made If They HAD beens beens Correctly classified and reliable to Participate in Microsoft’s employee stock purchase scheme . The case was decided on the basis of the temporary employees who had worked for many years.

The Microsoft case centered on the language found in Microsoft’s Employee Stock Purchase Plan (ESPP). In this plan, Microsoft defined plan participants (all eligible to participate in the plan) as “common law employees” on the company’s payroll. The only employees who were specifically excluded from the ESPP were employees who worked less than half-time. In reference to the independent contractors, the court held that because they were common law contractors and not independent contractors, Microsoft had no legitimate basis for rejecting their claims claims. With regard to the temporary staffing agencies,

  • recruitment
  • Training
  • Duration of employment
  • Right to assign additional work
  • Control over the relationship between worker and agency

Employees are not entitled to benefits unless they are “eligible” employees under a plan, regardless of whether they meet the common-law test for “employee” status. In other words, a plan shall not adopt or incorporate the common law definition of an employee in delineating the scope of its coverage. Employers are free to draft employee benefits plans to leave certain groups of workers. For example, a plan can exclude contingent workers or workers. It can also exclude workers who do not elect to participate in the plan.

The case and subsequent appeals were heard in the United States Court of Appeals for the Ninth Circuit . Before a final ruling could be issued, Microsoft settled the case for US $ 97 million. The Microsoft permatemps collected their money almost 10 years later.

See also: Criticism of Microsoft

IRS tax rulings

Simultaneous with Vizcaino , the United States Internal Revenue Service issued a ruling that Microsoft owed millions of dollars in payroll taxes. The IRS determined that they were common law employees of Microsoft and the staffing firm’s role was simply that of payroll processor .

See also: IRS Reclassification

Legal changes

See also: UK agency worker law
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As a result of the legal and tax rulings, human resources organisms Has Many companies changed policies Towards Their temporary employees. Microsoft, for example, decreases the amount of time required to complete the tasks. Other companies that have created policies that can be assigned to specific projects that last just a few months. Individuals are often prohibited from taking back-to-back assignments within an agency’s client agency.

When a company requires a break in service of its permatemps, the result is often those employees who have a back-to-back assignments. Other permalinks for personal breaks and simply use the time as vacation. In most cases, they are eligible for unemployment insurance as they nominally look for work. This form of permatemping may be attractive to those not wanting a steady, full-time, or year-round position, or not wanting to be committed to one position or one employ.

Another arrangement to avoid long-term serial temporary assignments is to “in-source” the work to be done, and not the position that does the work. In this arrangement, a staff member does not have a job. The staffing firm still needs to be on the job.

Some of these alternative arrangements barely different from the pre- Vizcaino format for permatemping. Laws and legal rulings continue to define the permatemp-employee relationship. The IRS continues to warn many companies they may owe employment taxes for their temporary workers and employee lawsuits over temping repeat the same arguments.

Due to the 365-day rule, high value contractors (typically in IT) who choose to accept the risk of not receiving benefits and contract termination in exchange for higher hourly rates are forced out of standard business relationships. This article is available in: English (en) [fr] [de] [fr] [en] [fr] [en] [fr]

Job stability

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Some permitemps also disagree on the effectiveness of lawsuits and new laws to regulate hiring.

Other critics note that the constant job turnover mandated by human resources department policies has the effect of increasing the unemployment rate , which has led to wage deflation in fields with large numbers of permatemps.

In the wake of employee lawsuits, most companies have not increased hiring of staff in positions typically held by permatemps. In fact, Rather than risk lawsuits, Many firms-have Decided not to hire Within Their Own Country at all, INSTEAD turning work formerly done by Their pools of permatemps over to outsourcing firms in other countries.


In Microsoft’s corporate culture, the presence of permatemps created a caste -like system. That permatemps HAD socially integrated into the corporate culture, and que le company HAD permatemps included in corporate events and gift giving evidence Was Both in Vizcaino and to the IRS for a common corporate culture. ………………….. The second class division between regular employees and permatemps. (At one time temporary employees at Microsoft, to be hired on permanently, with accompanying stock benefits, as “being knighted.”)

Many corporations hire low-skilled or unimportant employees. Permatemps </s></s> </s></s> </s></s> </s></s> </s></s> </s></s> </s></s> </s> Permatemps might be forced to share office space, cubicles or phones when regular employees have their own. Employee badges for permatemps might be a different color, and permatemps may be recognized in the corporate e-mail system by dashes or other identifiers appended to their login ID. By declaring positions filled by permatemps to be low-skilled and making it easier for regular employees to identify their co-workers who are permatemps, companies create a sense of elitism in their regular employees. Permatemps, as a group, might be known by epithets such as “dash trash” (Referring to an email account). [1]

Frequently permatemps are highly skilled, great workers, PARTICULARLY in the IT field, citation needed ] purpose are still not allowed to Participate in company events or Receive bonuses for work well done. If They earn over the United States Department of Labor minimum for overtime exemption, They May be Asked to put in similar overtime hours to benefitted, salaried employees without overtime compensation. Depending on the staffing firm and corporation policies, permatemps may find themselves in one of several positions, all of which require the same level of work from their coworkers:

  • Working for an inclusive corporation that allows permatemps limited rewards for good work, with a staffing firm that provides some benefits. If a staffing firm offers benefits they are occasionally immediate, but more typically the employee must wait several months to a year before. Some staffing firms have their own rewards programs for things like good contractor evaluations and length of employment.
  • Working for an inclusive company through a staffing firm that offers no benefits. For example, a corporation might make up for a lack of holiday pay by paying for the day. This would eliminate common situations where permatemps received reduced pay due to forced time-off (such as company-wide closings on New Year’s Day or Christmas holidays).
  • Working for a non-inclusive company with a benefit-staffing firm.
  • Working for a non-inclusive company with a staffing firm with no benefits. Staffing firms are competitive, and long-term contracts vary between companies. While some do offer tangible benefits such as pseudo-benefits. For example, a contracting company might advertise insurance as a benefit for its contractors, when all they offer is the opportunity for the insurance. Many corporations have contracts with staffing firms that allow them to switch from one firm to another. The corporation hiring them permanently. Unfortunately,

See also

  • Employment agency
  • Independent contractor
  • Contract attorney


  1. Jump up^ The Seattle Times “On Microsoft’s Redmond campus, the distinctions between various classes of workers are clear, and part of the company lexicon. Staffers are called “Blue Badges,” the color of their magnetic passes. “A-dashes,” the preface on their e-mail addresses …. “

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