Certified Staffing Profesional Practice Exam

In which situation are staffing firms typically considered the sole employer?

1. Health and pension benefits.

2. Workers compensation.

3. Family medical leave.

4. Employment taxes.

The correct answer is: Employment taxes.

Staffing firms are typically considered the sole employer in the context of employment taxes. When a staffing firm places a worker at a client company, that firm retains the responsibility of handling all employment-related taxes for that worker. This includes payroll taxes such as Social Security, Medicare, and federal and state unemployment taxes. Client companies rely on staffing firms to manage these obligations, as the staffing firm is the one that sets up payroll and withholds the appropriate amounts for taxes. This employer-employee relationship establishes the staffing firm as the legal employer in terms of tax responsibility, even though the employee may work under the direct supervision of the client company. In contrast, scenarios such as health and pension benefits, workers compensation, and family medical leave generally involve a shared responsibility. For instance, while staffing firms may provide certain benefits, the client company may share in providing others, depending on the agreement and the specific laws or policies in place. Therefore, the primary role of the staffing firm as the sole employer is best highlighted through its exclusive responsibility for employment taxes.