Are true temporary employees Worksite Employees for purposes of the Rev Proc?
No. The IRS did not have these employees in mind when it wrote the Rev. Proc. I know that the literal wording of the Rev. Proc. implies that temps are Worksite Employees, but that’s not the direction the IRS is headed. Therefore, if a PEO has both true temps and “permatemps,” the true temps simply should be regarded as common law employees of the PEO (as they almost undoubtedly are), the same as the PEO’s back office employees. I believe the PEO can continue to cover its true temps as its common law employees without great concern of IRS challenge, even if the COs for whom those temps provide services do not cosponsor the PEO’s plan. Usually it is easy to tell the difference between a temp on the one hand and a permatemp or employee under a long term arrangement on the other. In a close case, consult with legal counsel. • What is a PEO for purposes of the Rev. Proc? Notwithstanding my earlier comments on the issue (see Q&A 166), I do not believe the IRS will interpret the Rev. Proc. to
