Do temporary employees have the same rights & benefits as permanent ones? Why do companies often go for part-time workers instead of regular full-timers? And most importantly, what’s the best way to establish a secure & mutually beneficial legal relationship between a temporary worker and you, the employer?
Today, we tell you everything you need to know about temporary employment, from standard contract terms to key business benefits of hiring temps. And since you’re here, feel free to download our premade temporary employment contract template, customize it to your needs, and start hiring part-timers right away!
What’s a Temporary Employment Contract?
A TEC is a legal document outlining the terms and conditions for any paid position or role for a particular duration, project, or task. Much like a regular employment contract, TE contracts cover key job specifics, details of expected deliverables, and other legal stipulations of value.
Putting everything in writing ensures legal clarity & protection for both parties to the contract. If things escalate in the future, both parties can rely on this document as evidence of the mutually agreed-upon terms before a court of law or a disciplinary committee.
Temporary Employment – What’s It Like?
Here are some basic pointers to help you understand how most temporary workers are hired & compensated in the U.S..
- Temps may be direct employees of your company or a staffing agency
- May be at-will workers (either party can terminate without notice under the contract at will) or bound by contractual terms
- May work on or off-site
- May be part-time, full-time, or seasonal
- Mostly paid hourly wages or, in some cases, a monthly salary
- Mostly work under 1,000 hours or one year for your company
Employees in this type of employment are sometimes referred to as…
- Temps
- Interims
- Part-timers
- Seasonal workers
- Outsource
Note that temporary workers are not the same category of workers as contractors or independent freelancers who count as self-employed. Contractors or freelancers do not qualify as employees in the eyes of the government and are unable to benefit from employee welfare laws such as the Family and Medical Leave Act.
Real-Life Use Cases
Hiring temps is a great way to meet different business needs. For example…
- A retail store might hire temporary staff to handle the influx of customers around Christmas
- A farm owner may hire farmworkers to collect the late summer harvest
- A popular hotel might hire short-term employees to accommodate a surge in visitors during peak vacation time
- An individual or company may hire an accountant who only works during audit season
- An individual or company may hire a tax lawyer who only works during tax filing season
Why Companies Go For Temps?
From greater flexibility to manage HR to lowering employment costs for company owners, there are so many reasons why businesses choose to hire part-time workers instead of full-time ones.
Here’s a quick overview of why companies sometimes go the temp route:
- HR Flexibility: With temps, businesses have more freedom to adjust their staff size quickly as needed.
- Resource Conservation: Companies benefit from cheaper labour as part-timers don’t claim the same benefits as full-time staff (such as health benefits or paid time off).
- Optimization of Workflow: Companies can distribute workload better, allowing them to increase the quality of work and productivity standards for regular employees.
- Testing New Talent: Companies are able to try out a potential employee before committing to a long-term contract.
- Hiring Specialists: Companies are able to hire specialists on an ad hoc basis to fill in a particular knowledge or skill gap.
- Employee Retention: Improved work-life balance for regular employees, which in turn leads to higher levels of job satisfaction and employee retention.
- Temporary Replacements: Companies are able to hire temporary staff to cover for an employee on sick, maternity, or other official leave. To learn more about what leaves you are entitled to in the U.S., search for our comprehensive blog post on the subject!
What We Offer
At WordLayout, we are committed to making your HR systems more efficient and productive. That’s why we are constantly developing pre-standardized templates of employment contracts, ideally designed for any employer based in the U.S. (or beyond!). Thanks to our team of in-house lawyers & document experts, we have created a template so you don’t have to spend hours figuring out the right terms for your temporary employment contract. It is compliant, covers more than the basics, editable, and easy to adjust to your needs.
What’s Inside?
The temporary employment contract includes the following information or legal terms:
- Date and location
- Names, contact details & dated signatures of both parties
- Job title & description
- Start date
- Expected end date
- Work schedule
- Work location (on-site, remote or hybrid)
- Pay rate
- Overtime rules
- Details of bonuses/commissions (if any)
- Confidentiality or data protection clauses
- Code of conduct
- Leave rules
- Termination details
- Law governing disputes
Clause-by-Clause Breakdown of our Premade TE Contract
Navigating your way through a legal contract can feel daunting at first! Lucky for you, we are here to walk you through each clause in our predrafted contract. To lessen the research burden on you, we’ve already included the most essential clauses found in temporary employment contracts.
Tailor this premade legal framework to your use by deciding which clauses or sections to keep. You can also rephrase any text to make it align with your company policies and applicable state laws.
Once you fill in the required info & check the boxes that apply to you, make sure to have the document signed by both parties to make it legally binding.
Here’s a clause-by-clause breakdown for your guidance:
Step 1: Who is hiring whom?
Your first step is to add details to accurately identify both parties: the temporary worker and the company hiring.
- Write down their full legal names
- Where do they live (for workers) or operate (employers)?
- On what date does the contract officially start?
Step 2: Defining roles and responsibilities
Here, you want to specifically map out what the new employee is expected to do during the course of their professional duties.
Make sure to specify:
- What position or service is the employee hired for? Fill in the exact job title or designation in the blank space provided.
- Is the position full-time or part-time? This information is crucial for ensuring compliance with laws such as the Fair Labour Standards Act, which sets the rules for things like overtime pay and working hours.
- The list of tasks, projects, or services the temporary employee is expected to work on during the employment period.
Step 3: Determine contract duration
The key difference between a regular and a temporary employment contract is the duration. A temporary agreement has a specific end date. It expires after a set time, unlike most job contracts, which are ongoing and signed for an indefinite period, until the employee quits or is fired.
Use this clause to add a clearly defined start and end date for the contract.
Step 4: Create a work schedule
Even though they’re hired for a short time, all employees are expected to diligently work their set hours. Make sure to specify the exact number of working hours in the blank space provided, say, per day, week, or month, as the case may be.
The No Benefits Clause
Temporary workers in the U.S (or for that matter, most other countries) can not claim the same type of benefits, exemptions, and allowances as permanent employees of a company. Make sure the person being hired under the contract knows this, to avoid a case of mismatched expectations or even legal difficulties down the road. That being said, in certain situations, a temporary worker may be eligible for health benefits.
Are temps eligible for health benefits?
To answer this, you need to first know how the law defines a full-time employee or FTE. Essentially, an FTE is anyone who works for a company for 30 hours a week or more on average, or 130 hours a month.
Now, if your company employs 50 or more FTEs, it is legally required under ACA to offer health coverage that is ‘affordable’ and provides ‘minimum value’.
Note that if a temporary or seasonal worker is expected to work only a short time (say, 3 months) and is not working 30 hours a week or more, the employer may exclude them (or treat them differently) for some ACA obligations. Of course, employers may still choose to offer health coverage to temporary workers, but they are not penalized under the ACA’s employer responsibility rules if they don’t.
Eligible companies must also comply with information-reporting requirements, including IRS Forms 1094-C and 1095-C.
Step 5: Determine a compensation structure for the employee’s work
Now, let’s talk money! At its core, all employment contracts involve the offering of a service in exchange for a financial reward. Call it salary, fee, or wages, workers need a certain level of security & guarantee when it comes to when, how, and what they’ll be paid for their services
Use our template to:
- Specify an exact pay rate, say, $25 per hour or $100 per week.
- Clarify how often the payment will be made: weekly, biweekly, or monthly.
- Decide ON what method will be used to process payments: direct deposit, check, and ‘Other’ options available.
The Termination Clause
Most legal contracts carry a clause describing the only lawful ways through which the contract can be dissolved. Remember, for employers, a case of wrongful termination can cost thousands or even millions of dollars in damages. For those who are terminated, the unexpected loss of income can be devastating and a major life setback.
We give you two standard options to choose from:
- Immediate Termination: Any party can end the contract whenever they want, whether or not they have legal grounds to do so.
- Termination with Notice: Contract can only be lawfully terminated if either party gives prior notice in writing. Mark this duration by specifying the exact number of days, weeks, or months, as per your company policies & applicable state laws.
Returning Company Assets
It’s common for temporary workers to rely on the company to provide all the essential tools & equipment they need to do their job!
Use this clause to ensure the transfer of any legal responsibility for ensuring proper care & use of company-owned assets to the temporary worker.
For work involving special high-value or sensitive equipment, feel free to track using our free Employee Equipment Agreement template!
Ownership of Intellectual Property
Apps, inventions, or logos – employees are always creating new forms of intellectual property. But can they legally call, credit, or patent these works as their own? The answer depends on specific contract terms and, to a lesser extent, local laws.
Most contracts in the U.S. grant the employee ownership rights to works created during their period of employment. That being said, any such work must fall within the scope of their professional duties – for example, if the employee were to create a mobile app on their own time and without using company resources, it would likely be considered their own intellectual property (unless specifically prohibited by the contract).
The IP clause in our standardized template does the same. In addition, the employee is also further obliged to do whatever they (reasonably) can to protect the employer’s IP rights – even after the temporary employment ends.
Confidentiality
With consumers & competitors watching your every move, companies must be able to protect information from falling into the wrong hands. From client lists & Trello passwords to new product prototypes, even a small lapse by one person can have major repercussions for your business.
To avoid this, employers add a confidentiality clause in the employment contract, binding their workers to secrecy. In our standardized confidentiality clause, we offer the following guarantees for the employer:
- Employee not allowed to disclose or permit the use of confidential information except as needed to do their job
- Employee MUST do what they reasonably can to protect confidential information
- Employee not to share information with unauthorized individuals or entities (say, rival businesses)
- Employee accepts that a violation may result in disciplinary or legal action against them
What Are Non-Compete and Non-Solicitation Clauses?
Even though temps are hired for a short while, they still have access to all your trade secrets. From secret cooking recipes to confidential client lists – in the wrong hands, sensitive information can wreak havoc for your business.
So, if you want to protect your company’s standing in the market, always add a non-compete clause to legally control the actions of your former temp employees even after they are gone.
Cover all business or professional scenarios, we give you 4 options to choose from
- No obligation on the worker not to compete with the employer after the employment period.
- No obligation on the worker not to engage the company’s employees or customers after the employment period.
- Workers are obliged not to compete with the employee after the contract ends. If so, note the duration and geographical zone of this obligation (Non-Compete Clause).
- Workers are obliged not to partner up with the company’s clients or try to hire their employees (Non-Solicitation Clause).
Are non-competes banned in the U.S.?
The law on non-competes varies greatly by state. States like California, Minnesota, North Dakota, and Oklahoma have already banned non-compete agreements for employees, with only limited exceptions. In Nevada, hourly wage workers cannot be made to sign non-competes, while in states like Oregon, they are only legal for employees earning above a certain salary threshold, and even then, must be limited in duration and geographic scope. Learn more about non-competes here!
The Severability Clause
A standard part of most job contracts, severability clauses are exactly what they sound like: If one part of the contract is deemed invalid by a court, then the parties can simply ‘sever’ that part off while keeping the rest of the agreement intact.
Let’s say a temporary employment contract requires the employee to pay a penalty fee for early termination of the contract. However, if a court rules the penalty excessive, the clause is deemed invalid, but the remaining terms of the contract remain in effect.
In our draft framework, we go one step further by specifically pointing out what happens if any of the restrictive clauses are later found to be too broad and vague by the court. For example, a non-compete clause may result in the employee being unable to find work elsewhere, or a non-solicitation clause may unfairly restrict the employee from engaging with former clients or colleagues.
All in all, this clause ensures that the agreement remains fair and legally compliant, protecting both the employer’s interests and the employee’s rights.
Governing Laws & Dispute Settlement
Laws governing employment contracts that are bound to vary across state lines. For example, California is known for its strict stance against non-compete agreements, while New York has some of the most robust wage laws in the country. In short, you need to know which laws will be applied when enforcing or interpreting the contract.
To avoid confusion or legal ambiguity, it’s best to decide a priori which statutory laws or dispute resolution methods apply to you. Both parties must use this clause to identify which state’s laws shall govern any future dispute (you’d fill that in yourself, like ‘New York’ or ‘Texas’).
If a party wants to take things to court, it has to be done in a certain city or county within that state (to be specified by the user). Both parties agree that these courts shall have exclusive authority to handle the case.
Want to modify the agreement?
This clause lays down the procedure for making any changes to the agreement after it has been signed, say both parties agree to extend the temporary contract or change the work schedule.
Any changes to the original agreement must:
- Be put in writing
- Be mutually agreed upon and signed by both parties
Need to add additional provisions?
If you feel any important terms or conditions were overlooked in our premade framework, you can use this section to include them. A blank space is provided for any extra clauses or stipulations you wish to add.
For example, the parties may agree on specific confidentiality terms or a new compensation structure. This section can be used to add those provisions in writing, ensuring both parties agree and sign off on the updates.
Signatures
In the end, both parties must add their dated signatures to fully execute the temporary work contract, making it legally binding as of the date of signing.
You can use an e-signature solution to help you streamline the execution process and ensure that each employment agreement is securely signed, stored, and shared.
This Contract Template Is Perfect For…
- Employers looking for temporary workers
- HR departments managing short-term hires
- Temporary workers or contractors
- Staffing agencies placing candidates in fixed-term roles
- Employment lawyers
You Might Also Be Interested In…
- Employment Contract
- At Will Employment Contract
- Internship Contract
- Non-Compete Agreement
- Non-Disclosure Agreement
- New Hire Checklist
- Exit Interview Form
Download our easy-to-use, pre-made template to create a temporary employment contract, ensuring a smooth and productive work relationship with temporary, part-time or seasonal workers!
Disclaimer
Remember, employment agreements need to be clear, put together with care, and recognized by the local state. For this reason, you should run your final version by a legal professional who is both, licensed to practice law in the relevant jurisdiction and well-versed in the workings of the job or industry your agreement relates to.
Our fillable and print-ready template can be easily downloaded in editable (Word, Google Docs) and protected formats (PDF)!
Summary
A Temporary Employment Agreement is a legal contract between an employer and an employee hired for a limited period or specific project. It outlines the terms of employment, such as job duties, start and end dates, compensation, and other conditions. Clearly defining the employment relationship for a temporary period ensures that both parties understand their roles, rights, and obligations. A well-crafted agreement helps you avoid unclear job expectations and temporary role definitions, prevents disputes over compensation, duration, or job scope, and minimizes legal risks from informal or undocumented work arrangements.
