You incur considerable risk using a staffing company which classifies its staff as contractors rather than W2 employees. Please see the following – https://independentcontractorcompliance.com
regarding a recent large judgment against Arise Staffing. “Client companies can suffer as well from IC (independent contractor) classifications lawsuits, even when they are not the primary target. In the Arise cases, the client companies were likely to have incurred or continue to incur substantial legal costs themselves and may be subject to further legal claims. Moreover, where the client company itself directs or controls the workers found to be misclassified as ICs, it may be found to be a joint employer with the staffing company or the sole employer of the workers. In either instance, client companies run the risk of joint and several liability with the staffing company, or liability on its own, for violation of labor laws or for failure to withhold taxes and pay for unemployment. Indemnification clauses do not offer complete, or sometimes any, protection to corporate clients, especially where the staffing company does not have the financial resources to make the client whole“.