How do you say this in English (US)? Can anyone who has lived in Japan explain this in English for me? How would you explain 派遣社員? What I would like to know is that difference between permanent employees. Also how they are treated.

See a translation

@Sumizo

temp employees.

temporary employees are contracted thru an agency on a contractual basis. (it could be short term or long term) they receive their pay from temp / staffing agency. if you are a permanent employee, you are directly hired by a company, and receive insurance benefits after 3 month probationary period.

If you are contracted to work for a company thru the temp agency, the staff member is not entitled to company insurance or benefits. temp agency also does not provide insurance and you must seek the benefit on your own.

how an individual is treated has nothing to do with who their employer is or if they are temp or permanent, all people are to be treated fairly by law. United States has strict laws especially when it comes to employment and the fair labor standards.