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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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I am not a traditional staffing company, but I provide employment

Resolved Question:

I am not a traditional staffing company, but I provide employment services to the corporate world and TV production companies…special effects artists, editors, etc. In some instances employers provide me with the job skills they are looking for in an individual and I will locate that person. If the employer hires them, they will pay me a placement fee. In other instances, I will recruit an individual and provide this person to the company on a temporary basis as a W-2. I am the employer of record and I am paid a continuing fee. In some cases I will provide an independent contractor to an employer for short term assignments. I have successfully defended this relationship on at least two occasions with state EDD departments.

I was working with a TV Production company that asked me to payroll some people that they had recruited, hired and were working at their offices under their supervision, and they were compensating these individuals as independent contractors. The company transferred these individuals to me to payroll, as well as any individuals they hired in the future. All of these individuals are being compensated as independent contractors. I am paying the individuals and the company is reimbursing me and paying me a 9% fee for pay rolling. As an accommodation I am supplying the contractors with the 1099. I did not hire any of these individuals and I cannot place them at any other companies.

My question is, “am I considered the employer of record since I am supplying the 1099’s or is the TV production company considered the employer of record since they are recruiting, hiring, supervising and controlling the means whereby the work/service is accomplished?”
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.

Since the company transferred the employees to your payroll and you contractually agreed to that, the workers would typically be considered your employees based on this hybrid type of employment relationship. You would not normally have the discretion to treat them as independent contractors since the company does control the terms of their employment and you have contractually agreed to include them on your payroll.

They would normally be treated as though you were contracting them out as temporary workers to a third party, in which case they would be your employees.

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