I hired a number of employees to work on a short-term project for me. I classified them as “temporary” and therefore not eligible for benefits (other than paid sick leave). The project keeps getting extended though, and many of those employees have now been working for me for several months. At what point do I have to fire them or make them regular full-time employees?
There is no specific time limit on how long a worker may be classified as “temporary.” However, if temporary employees have been performing the same job duties as regular full-time employees for an extended period but are ineligible for the benefits those other employees receive, their employer could face liability.
In 1992, a group of temporary workers sued Microsoft for improperly maintaining them as “temporary” for years at a time.
Referring to themselves as “permatemps,” these workers were hired on a short-term basis during a period of rapid growth for Microsoft, but many remained on staff as “temporary” for two or more years. They were not permitted to participate in Microsoft’s employee benefits (such as health care, pensions and stock purchase plans), even though they performed the same jobs as regular full-time employees, and often for a longer tenure.
Following an appellate court ruling that the permatemps should have been permitted to participate in Microsoft’s stock purchase plan, Microsoft negotiated a $97 million settlement with them. Read More