Page 137 - Essentials of Payroll: Management and Accounting

• ESSENTIALS of Payr oll: Management and Accounting
Maintenance work
• Overlapping work related to shift-change problems

Workers Paid by a Temporary Agency

It is common for companies to ask a temporary agency to send workers
to complete short-term jobs. The temporary agency is considered the
employer of these workers if it screens and hires them and can fire
them. Under these conditions, the temporary agency is liable for all tax
withholdings from their pay. The company paying the temporary
agency for these services is liable only for prearranged fees paid to the

agency; it is not responsible for their payroll taxes.

The Workweek
The workweek is a fixed period of 168 consecutive hours that recur on
a consistent basis. The start and stop times and dates can be set by man-
agement, but they should be consistently applied. And whatever the

workweek is defined to be, it should be listed in the employee manual
to avoid confusion about which hours worked fall into which work-
week, not only for payment purposes but also for the calculation of
overtime.
It is unwise to alter the stated workweek, since it may be construed
as avoidance to pay overtime. For example, assume a company has a his-
tory of requiring large amounts of overtime at the end of the month
in order to make its delivery targets. Suddenly company management
elects to change the workweek from Monday through Sunday to

Wednesday through Tuesday right in the middle of the final week in a
month, thereby reducing much of the overtime hours that employees
would otherwise earn to regular hours. This would be a highly suspect
change of workweek that might be construed by the government as a
way to avoid overtime payments.

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