Payrolling and temp work: similarities and differences
Legally speaking, there is a clear interface between a payroll company and a temp agency, but there are also several differences. So what’s the deal? What are the advantages of payrolling and how can it benefit you?
What is payrolling?
Payrolling implies that an employer (also called user) outsources part of his duties as an employer to a third party to the payroll company. The user is still the actual employer, but the payroll company becomes the freelancer’s legal employer, who can have self-employed status. The freelancer decides for which user he works, during which period and under which payment conditions.
What is temp work?
Companies who are searching for personnel ask a temp agency to recruit someone on their behalf. Jobseekers also reach out to temp agencies. The temp worker’s employer is thus the temp agency. That way, databases with jobs and databases of jobseekers are constituted.
Although a payroll company and a temp agency must both apply the legislation on temp work, there is a significant difference between them. Their duties and tasks are very different. A temp agency focuses on recruitment and selection: they go in search of the right company for each candidate temp worker. Payrolling does not perform this matching. A freelancer who contacts a payrolling company has already found a client. Freelancers often perform separate assignments for several users. They are often artists, including singers, actors, illustrators, photographers or make-up artists. They can also be translators, consultants or IT professionals. Because they often work for different clients, they are looking for ways to arrange their admin in a clear, practical way.
Handy software rather than a database
A temp agency has various local branches that temp workers can liaise with. A payroll company has fewer branches. Instead it relies on very user-friendly software to enter contracts without too much hassle. Freelancers and employers can enter the contracts in the system themselves. The rest of the processing is done automatically. A payroll company thus works as a facilitator, from a central location. When the freelancer or employer has questions, he or she can contact customer services.
Benefits of payrolling for employers
- You outsource part of your admin to another professional, which saves you time.
- You can respond to unexpected circumstances because you can temporarily hire additional personnel, quickly and simply.
- You can evaluate new employees on probation before offering them an open-ended contract.
- You can choose between day, weekly and monthly contracts. You don’t pay wage costs when an employee fails to turn up or is sick. You only pay for the hours worked.
Benefits of payrolling for freelancers
- You can earn money on the side without too much red tape and/or work in a difficult job climate.
- You work under an official contract, so you accrue all the rights and have all the duties, even if you are not permanently employed.
- You can earn money for a short period of time without being locked into an open-ended contract.
- You know that you will be paid at regular intervals.
- Someone else takes care of the admin side of things.
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