What is "permatemp"

n. An employee whose official status is of a temporary, despite serving his or her function for sufficient time to be contracted as permanent.

A permatemp is a temporary employee who works for an extended period for a single staffing client. The word is a portmanteau of the words permanent and temporary.

There are two types of permatemp employment relationships. In the first form, a public or private employer hires employees as "temporary" or "seasonal" employees, but retains them, often full-time for year after year, often with less pay and without any benefits. These employees often do the same work as permanent employees, but without the same pay, benefits, and labor rights. The second kind of permatemp is an employee of a staffing service provider, payroll agency or Professional Employer Organization, which sends workers to work in a long-term, on-site position for a private company or public employer. The employee is paid by the staffing service provider or agency rather than by the primary employer.

In the United States these agencies are required by the US Internal Revenue Service (IRS) to pay the employer portion of Social Security and Medicare taxes (FICA) and Federal Unemployment Tax (FUTA) in accordance with IRS Publication 15A. U.S. leasing organizations are also required to provide employees with health coverage by the United States Department of Labor, the requirements of the health care offered will change in 2014 to comply with the Affordable Care Act ( ObamaCare). Long-term full-time leased employees in the U.S. may also be offered a retirement benefit package with a minimum (leasing) company contribution of at least 10%, IRS Form7003.