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department of labor building DOL headquarters, Washington D.C. (Phot:o: Michael Scarcella/ALM)

Companies frequently contract out specific services needed for their businesses in order to improve efficiency or to reduce costs associated with directly employing individual workers. Use of third parties to contract for services such as transportation, food services, cleaning or photocopying has become ubiquitous in today’s economy. Staffing companies in particular, have created business based on such contracting arrangements to take on the responsibility for compensating workers performing services for the business, reporting to taxing authorities, and providing health benefits to the workers.

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