What Is a Temporary Employee?

Generally, a temporary employee is any worker in a temporary position whose income taxes, Social Security taxes, and Medicare taxes are withheld by the State of North Carolina and receives a W-2.  Temporary employees differ from independent contractors, who are self-employed and receive a Form 1099.

When considering a short-term workforce need, agencies must determine the details of the proposed working relationship between the agency and the worker to help ensure that the worker is correctly classified as an employee or independent contractor  for employment tax obligation purposes.  This will also determine whether this policy applies to that worker.

IRS Three-Factor Test

In determining whether the person working is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.  Facts that provide evidence of the degree of control and independence fall into three categories:

Behavioral

Tab/Accordion Items

The worker is likely an employee if the employing agency determines the worker’s work schedule and supervises their work.

The worker is likely an employee if they do not bring specialized skills to the job that no one else has or if they will receive job-related training.

Financial

Tab/Accordion Items

The worker is likely an employee if their pay increases by working more hours rather than by using any managerial skills they may have.

The worker is likely an employee if any costs they incur (i.e., laptop, desk, phone, etc.) are related to the job rather than to building or marketing a business.

Type of Relationship

Tab/Accordion Items

The worker is likely an employee if the working relationship is permanent or indefinite.

The worker is likely an employee rather than an independent contractor if the work they perform is necessary, critical, or central, rather than tangential, to the business of the employing agency.

Definition in N.C.G.S. 126-6.3(c)(7)

G.S. 126-6.3(c)(7) defines a temporary employee as "a State employee who is employed in a temporary appointment for a limited term, including:

  • a State employee hired from the OSHR Temporary Solutions Program,
  • directly hired by an agency,
  • hired by an agency from a private staffing firm, or
  • any other method used to fill a workforce need for a limited period of time.

The term does not include a career State employee as defined by G.S. 126-1.1."

Off