Any temp workers I have ever used filled out a time card from the temp agency, the temp agency billed us, and the temp agency paid the temp. If they went over 8 in a day or 40 in a week there was overtime pay. The hiring company uses temp agencies for several reasons. Temporary work loads, trying out people before hire (you pay finders fees in that case), and just saving the HR hassle. The hire company pays a lot more than what the temp agency pays as the agency covers workers comp, UE (in some cases), FICA, HR costs, overhead, etc, and makes an evil profit. All things that we did not have to cover but it did add up to about double the temps hourly rate. Of course as you hire more professional people that ratio changes because of the $/hr difference. I have never heard of a temp agency using a salary but there could be some negotiated contracts for longer terms which we never used.
I give this fable ZERO BONGS as I do in any story where a DUche claims to be working.