permatemp is a temporary employee who works for an extended period for a single staffing client. 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 employ as a “temporary” or “seasonal” employees, but retains them, often full-time for year after year, often with less pay and without any benefits. These employees often do the same work as permanent employees, but without the same pay, benefits, and labor rights . The second type of employee is an employee of a staffing service provider, a payroll agency or a professional employer, who sends a job to a long-term, on-site position for a private company or public employer. The employee is paid by the staffing service provider or by the primary employer.

In the United States, the US Internal Revenue Service (IRS) to pay the employer portion of Social Security and Medicare Taxes (FICA) and Federal Unemployment Tax (FUTA) in accordance with IRS Publication 15A. US leasing organizations are also required to provide services to the United States Department of Labor , the requirements of the United States Department of Labor ( ). Long-term full-time employees in the US may also be eligible for a minimum contribution (Leasing) company contribution of at least 10%, IRS Form7003.


Traditionally, a temporary employee is hired to be a substitute for an employee who is on leave or to work for a period of time. A seasonal employee is hired for the limited time because the work is necessary for a certain part 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. Their work can range from day labor to high-priced consulting . The employee may work for a long time, but the working periods may be for a long time.

“Permatemps” are often distinguished by the company for a long period of time, possibly indefinite amount of time, and the requirements of the company. “meetings. This is where many Leasing Agencies in the US run afoul of the IRS and US Department of Labor. The IRS, in a effort to close loopholes which allow companies to hire temporary employees and thus avoid federal employee taxes have created a very clear definition of a “Common Law Employee” versus a “permatemp”. The IRS definition of a common law employee. IRS Publication 15A explains ” Under Common Law Rules, who will be responsible for what you will be doing and what will you do? performed “. IRS 15A also defines the role of staffing services” The staffing service has the right to control and the worker’s services for the client, including the right to discharge or reassign the worker. The Staffing Service provides further guidance for employment and employment, and is used for employment tax purposes. “Further clarification for US employees can be found in IRS Publication 15A Section 2. Misclassification of employees can lead to severe tax liability (IRS PUB Circular E) and civil penalties in the case of Vizcaino v Microsoft. In addition, if they are “qualified” as a common law employee, they are entitled to receive benefits from their co-workers, IRS Publication 15B. IRS Publication 7003 goes so far as to say “An individual who is actually a common law employee of the recipient (the worksite company) will not become an employee of another entity . ” they are entitled to receive benefits from their co-workers, IRS Publication 15B. IRS Publication 7003 goes so far as to say “An individual who is actually a common law employee of the recipient (the worksite company) will not become an employee of another entity . ” they are entitled to receive benefits from their co-workers, IRS Publication 15B. IRS Publication 7003 goes so far as to say “An individual who is actually a common law employee of the recipient (the worksite company) will not become an employee of 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 sometimes eligible to switch job positions within their companies. Even when employment is ” at will ,” regular employees of large 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 at an agreed upon rate, which may be higher than the pay rate.

Legal issues in the United States

Where a worker is employed in a full-time, full-time employment relationship, the employee is being exploited by being denied the wages, benefits, and employment rights enjoyed by other employees. While it is unknown how common this kind of situation is, class action lawsuits have been decided against Seattle , Washington and King County, Washington . These public sector chambers of general concern violation of ordinances or rules limiting the length of service of such workers.

Two California cases 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 employment of the Metropolitan Water District of Southern California . These cases 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 the employee 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 could have had a “property interest” in his employment that he could not be terminated without a hearing. The judge is also a member of the Board of the United States, of the United States, of the United States of America.

Staffing through temporary agencies est devenu common in the Silicon Valley technology companies. Permatemping 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 weather, or permatemps, remains to be seen.

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

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

Vizcaino c. Microsoft 

In 1996, a class action lawsuit Was Brought contre Microsoft Representing Thousands of current and train employees That HAD beens classified as temporary and freelance . The monetary value of the company may have been used in the past . The case has been worked out by Microsoft, worked alongside regular employees, and worked for long terms (years, in many cases).

The Microsoft case centered on the language found in Microsoft’s Employee Stock Purchase Plan (ESPP). In that plan, the Microsoft defined plan participants (les nomes à la participation de la plan) as “common law employees” on the company’s payroll. The only employees working in the field of ESPP were employees who worked less than half-time or half-time. In reference to the independent contractors, Microsoft has conceded that they have been common law employees and have not independent contractors. With regard to the individuals provided by 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 to adopt a common law definition of an employee in the scope of its coverage. Employees are free to draft employment plans that leave certain groups of workers. For example, a plan can exclude contingent workers or workers hired through a third party agency. 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 permited their money almost 10 years later.

See also: Criticism of Microsoft section: Labor practices

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 Were permatemp employed common law employees of Microsoft and the staffing firm’s role Was That simply 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 organizations and their companies have changed their policies towards temporary employees. Microsoft, for example, decreed that an individual could not be more than 364 days, and that it should be separated from the rest of the world. Other companies have created policies that have only recently been established. Individuals are often prohibited from taking back-to-back assignments within an agency.

When a company operates on a permanent basis, the result is often that of the two companies having a back-to-back assignment. Other permatemps plan for personal breaks and simply uses the time as vacation. In MOST cases, They Are eligible for unemployment insurance as long As They nominally look for work. This form of permatemping may be desirable, but it may not be a constant, full-time, or year-round position.

Another arrangement to avoid long-term serial assignments is to “in-source” the work to be done, and not the position that does the work. In this arrangement, the company does not have a staffing firm to fill a position, but rather hires it to do the work. The staffing firm is still on the site, still on-site at the corporation.

Some of these alternative arrangements barely differ 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 are forced to accept the risk of not receiving benefits and are forced out of standard business relationships. This causes for the contractor, who must continually move to new companies, and for the company, which must be retrained and familiarized to a new contractor with business rules and infrastructure.

Job stability

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

Other criticisms 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 their membership of positions 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 that the company had included permitting in moral events and gift giving evidence both in Vizcaino and the IRS for a communal corporate culture. Policy enforcement that now restricts permatemps from participating in moral events, employee social clubs and the like creates a second division between regular employees and permatemps. (At one time temporary employees), with “accompanying”, “being knighted”.

Many corporations hire temporary employees to do work they deem low-skilled or unimportant. Permatemps hired to do that work. Permatemps may be forced to share office space, cubicles or phones when regular employees have their own. Employee badges for permatemps may 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 by permatemps to be low-skilled and making it easier for them to identify their co-workers who are permatemps, companies create a sense of elitismin their regular employees. Permatemps, as a group, may be known by such epithets as “dash trash” (referring to an identifier and a dash prepended to an email user account). [1]

Frequently permatemps are highly skilled, excellent workers, particularly in the IT field, citation needed ], but are not allowed to participate in the company 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 discover themselves in one of the following positions:

  • Working for an inclusive corporation that allows for a limited period of time, with a staffing firm that provides some benefits. If a staffing firm provides services, they must be made available immediately. Some staffing firms have their own rates 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 vacation by paying for the day of the employee’s not working. This would eliminate common situations where permatemps may be reduced to forced-time-off (such as company-wide closings on New Year’s Day or Christmas holidays).
  • Working for a non-inclusive company that offers benefits at all times, with a benefit-offering 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 others are offering some of these services, they are offering some of these services and others, but others only offer pseudo-benefits. For example, a contracting company may advertise insurance as a benefit for its contractors, when they offer the opportunity for the full cost of insurance. Many corporations have contracts with staffing firms that do not allow them to switch to another firm, so they have a firming firm, they must stay with the firm for a short period of time. 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 assists. “A-dashes,” the preface to their e-mail addresses …. “

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