Currently, about one in five U.S. workers is contingent—that is, not directly employed by the company for which he or she works. That percentage is expected to rise to about 30% over the next decade.
One of the major drivers of this increase in contingent employment has been the use of “temp agencies” to avoid the basic obligations that employers have toward their employees.
Writing for The Hill, Tim Devaney reports:
“The National Labor Relations Board (NLRB) is widely expected to rule by month’s end that Browning-Ferris Industries, a Houston-based waste-disposal company, is a joint employer of workers provided to the firm by a staffing agency, experts say. As a result, the company would be forced to collectively bargain with those employees and could be held liable for any labor violations committed against them.
“Such a decision could hit companies from a host of industries, including restaurants, retailers, manufacturers, construction companies, financial services providers, cleaning services, and security companies.”
Devaney’s article includes this oddly slanted paragraph:
“Businesses say they are bracing for the worst. Some warn they will cut ties with staffing agencies that help recruit temporary workers, and subcontractors that provide janitorial and security services. They say they will bring those jobs in-house so they have more control over the situation.”
Yes, that would be a desirable outcome from everyone’s point of view except perhaps the operators of employment agencies that specialize in providing “temporary” employees and the employers who have been abusing the system.
Devaney describes that abuse succinctly:
“Labor groups argue that the joint-employer designations are needed to tamp down on the practice of using staffing agencies to provide ‘permanent temps.’ Companies exploit these relationships so they can shirk their responsibilities as employers, they allege.
“Under current labor law, companies are only liable for employees over whom they exert direct control by setting their hours, wages and job responsibilities. They can get around this requirement by working with staffing agencies to recruit temporary workers or hiring subcontractors to complete a job.
“Often times, the staffing agencies and subcontractors provide little to no supervision of these employees, so they argue they shouldn’t be considered their primary employer either, labor advocates say.”
Unfortunately, Devaney conflates this pending NLRB case with another case involving the liability of national corporations for the labor practices of their franchise owners. The argument presented against such a ruling is summed up as follows:
“This could discourage many entrepreneurs from opening a franchise, for fear of too much corporate interference.
“’Some people like being their own boss and don’t want to be told how to run their own business,’ Amador said. ‘They want to be able to make the decisions about pricing, when they open, when they close, who they hire, who they fire.’”
But this appeal to the age-old spirit of the independent entrepreneur is darkly laughable. About the only thing that many franchise owners do control is labor costs, with the implicit understanding that the size of their profit margins will depend on their ability to keep those costs as low as possible. So because of how the franchise agreements are structured, the corporations are, in fact, clearly complicit in the abuses of workers—including various forms of wage theft–that have often resulted.
Although both of these NLRB cases are important to stemming the exploitation of contingent labor, conflating them, as Devaney does here, allows opponents the opportunity to blur the distinctions between them and to make it all seem much more complicated and much more damaging to business than it actually should be. In most instances, the worst consequence will be that artificially inflated profits will simply be reduced to legitimate levels.
Devaney’s complete article is available at: http://thehill.com/regulation/labor/250880-businesses-brace-for-game-changing-labor-decision