The Staffing Edge Blog

Focus on your core business. We’ll take care of the rest.

3 Reasons Why Temp Agency Payroll is a Full-Time Job

Posted by Karen McMullen


Nov 25, 2014 9:05:00 AM

3 Reasons Why Temp Agency Payroll is a Full Time JobAll companies with any number of employees are responsible for payroll. Temporary agencies are no exception and are responsible for making sure that the employees that they have placed with clients are paid properly, on time and with the appropriate deductions made.  The more employees you have placed with clients, the more crucial it is that your temp agency payroll be handled correctly and in a timely manner.  One way to make sure that everything within the temp agency payroll is accurate and precise is to make the payroll a full time job. There are three very important reasons that make temp agency payroll a full time job.

1. It Matters to Your Candidates

When you do temp agency payroll, your temp employees expect everything to be nothing short of flawless. Just like any other workforce, they expect to be paid accurately and on time. They rely on you, their employer to calculate their payroll taxes correctly and remit them to the government. They expect a paystub and by law you are required to provide one that outlines their pay rate and the deductions that were taken off for that pay period. Being paid for vacation pay, statutory holidays and overtime correctly are important to any worker as well as being provided with a year-end statement for their tax filing.

One of the fastest ways to lose good employees is to make mistakes in their pay or in their deductions. You must remember that you rely on these employees to keep your temp agency profitable and strong. Your reputation is dependent on the impression that your employees make with your clients.  If your employees are not satisfied with how they are treated by the temp agency, particularly as it involves payroll, it will show in their work ethic and attitude. In addition, to your reputation with the client, you must consider that your reputation "on the street" with potential new employees will be affected. 

2. It Matters to Your Clients

Clients come to you to provide them with staff. That’s a given. But what they may not say is that they expect you to pay these employee’s correctly and meet all your obligations when it comes to payroll compliance.  This means that, as their preferred staffing supplier, it is imperative that you keep their workforce happy in this regard. A disgruntled temp worker can cause havoc in a work environment for both the client and other workers. Mistakes in payroll happen but if they happen too often good temp workers may seek employment elsewhere and your client may look to another supplier that can keep up with the demands of temp agency payroll.

3. It Matters to Your Staffing Firm

Sales and service is at the core of what you do but you can easily lose sight of these when it comes to the challenges of temp agency payroll. Having someone dedicated to ensuring that timesheets are in on time, hours are calculated correctly, and ensuring provincial and federal payroll obligations are met is key to a successful temp agency. Trying to do it all yourself while recruiting and selling is impossible the more you grow.

Not dealing with these obligations appropriately can not only lead to disgruntled workers and disenchanted clients but can also lead to a payroll audit from the CRA. If you have not fulfilled your payroll requirements, you will receive a penalty or interest. Depending on the extent of non-compliance, other penalties or consequences may also be incurred. Any employer who is not in compliance with the deducting, remittance and reporting requirements could be prosecuted. This includes fines from $1,000 to $25,000. You could also face a prison term of up to 12 months.

With payroll responsibilities, and the potential issues that can come from not complying with those requirements, it is clear that having a full time payroll person or staff for your temporary agency is a good business decision.

Starting a Staffing Agency

Topics: Temp Agency Payroll

Karen McMullen

Keep me informed with the latest staffing industry news

Jeff Kells  Freedom Staffing Group  Competing with the BIG multinational agencies ? IF SO, This case study is a must-read
David Machils  Intercast Staffing  Thinking of Starting  a Staffing aGENCY ? IF SO, This case study is a must-read