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Temp Workers Want a Better Deal

October 1, 1999
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Related Topics: Contingent Staffing, Featured Article
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Take a quick look at most companies today, and you’ll likely see aworkforce that’s comprised of a growing number of temporary employees. Infact, a closer look will reveal that many of these workers are filling positionsof increasing responsibility and importance.

The old image of temporary laborers who were brought in for a brief stint tocomplete menial, low-skilled tasks has been replaced by highly skilledprofessionals who are managing some of the most critical and complex projectsfor months on end. This shifting workplace trend, one that places core businessfunctions in the hands of temporary employees, seemed to happen almostovernight.

And just at the time when organizations are most in need of supplementaryskills and services, temp workers are digging in their heels and demandingimproved conditions and better on-the-job treatment.

Some temps are mad as hell
Many temporary-industry analysts believe what’s beginning to emerge is acollective voice that in some ways suggests that temps are mad as hell and aren’tgoing to take it anymore. "It" being what the growing rank oftemporary employees believes is second-class status in a two-tiered system thatplaces them at the bottom. And anyone who’s been following the Microsoft case(see "Supreme Court Decisions Require ADA Revision," Workforce, August1999) knows that it’s getting more difficult (and more risky) for companies toturn a deaf ear to the rumblings of temp workers who complain about substandardtreatment and a caste system they label unfair.

And before you dismiss what might appear to be the petty whining of atransient group of nomads, consider this: The U.S. Bureau of Labor Statisticsestimates there were more than 2.9 million people employed as temps in 1998, andthey project a whopping 53-percent increase in temp workers by the year 2006.The largest growing segment of temporary workers, according to the NationalAssociation of Temporary Staffing Services (NATSS), based in Alexandria,Virginia, is in the technical and professional sectors, which now make up over11 percent of the temp industry.

And as the temporary workforce grows, unrest among temps could spell nothingbut trouble for HR and their organizations. Yes, the level of contentment amongthis group is important indeed, particularly when you consider that these arethe folks developing your software, managing your financials, doling out legaladvice and interfacing with your most important assets: your regular workforceand your customers.

So why are temps so unhappy? It would seem they should be clicking theirheels in celebration. After all, there’s more work available for them, theirpay levels are increasing, and they’ve got all that flexibility -- what’sthe gripe? "This whole concept of flexibility is a joke," says CynthiaHunter-Shupe, an administrative professional in Damascus, Maryland, who’s beenworking as a temp since 1987. Shupe says that although many people are drawn totemp work so they can enjoy more flexibility in their work life, her experiencehas been that, in reality, temps are allowed very little flexibility while onassignment. But that’s just one of the many issues that exist for temporaryworkers, she says. She also cites the lack of benefits, lack of communicationand feedback while on assignment, inaccurate job descriptions and other issuesas fuel for the fire of discontent among temp workers.

Shupe says she has worked on hundreds of assignments, and claims that whilepay and benefits have gotten better since the late 1980s, when she first startedtemping, she believes companies can and should do more to improve workingconditions for temporary employees. Shupe feels so strongly about the issue,that in addition to working as a career temp, she’s formed a consultingcompany, Shupe Contingent Services LLC, that sponsors Contingent.com,a Web site designed to help temp workers and client companies improve thesuccess of alternative staffing relationships. Hers is just one of severaltemp-related Web sites that have cropped up in recent months.

Though Shupe’s site is geared toward addressing the issues of temporaryworkers and client companies through training and research, other sites providea venting mechanism for temps who are frustrated with their working conditions.

Temp 24-7, for example, encouragestemps to log on and "share the pain." Included in their menu is TempTales of Terror, Gripe of the Week and Temp Term of the Week. (One writer sharedhis definition of the aptitude test given by temp agencies as a "battery oftests designed to evaluate the temp’s ‘propensity towards subservience,’‘overworkability’ and ‘likelihood of suing.’") A temp fromIndianapolis shares his "gripe" when he describes how a five-minutetrip to the restroom prompted his supervisor to send in another co-worker tocheck on him.

Temps’ issues are getting more visibility
But temps aren’t the only ones acknowledging the shortfalls of temp life.Even the Department of Labor (DOL) in their publication, Occupational OutlookQuarterly (Spring 1999), cites the disadvantages of temp work, stating thatalthough temp firms are increasing their benefit provisions to their workers inhigh-demand occupations, "many other workers go without health insurance,paid leave and pension plans." The report also highlights other drawbacks:

"Temporary workers often receive limited feedback on theiraccomplishments because they often move on after completing a project; they don’tenjoy the satisfaction of seeing the long-term effects of their efforts. Inaddition, temporary workers may be treated as company outsiders and may be shutout of meetings and social functions. Some permanent employees view temporaryworkers as an obstruction to raises, commissions or overtime pay, or resentthose who receive higher pay rates."

A Washington, D.C.-based think-tank known as the 2030 Center released areport written by Labor economist Helene Jorgensen, Ph.D., that outlines alabor-law reform that would improve working conditions for temps. The reportclaims temp workers are "less likely to have employer-provided healthinsurance and pension coverage," and states that "they are furtherdisadvantaged because they are not covered by health and safety regulations attheir workplace (the client company), and often would not qualify for workers’compensation in case of an on-the-job injury."

Jorgensen, who is also a 2030 Center senior policy fellow, doesn’taltogether dismiss the benefits of temporary work arrangements, but she doesdenounce the use and abuse of long-term temp workers known as "permatemps."This is a label that describes temporary workers who are kept on assignment atone company for months and sometimes years at a time.

According to Jorgensen, many companies use permatemps to eliminate positionswithin a company and reduce costs. The temp worker is believed to get the shortend of the stick because the client company (who is not viewed as the"employer" -- the temp agency is considered the legal employer), doesn’thave the same obligations to the temp worker as their full-time"regular" staff. Although these permatemps are difficult todistinguish from the regular staff, they aren’t entitled to company benefits,and Jorgensen claims they’re even denied the protection of certain labor laws.

Labor laws protect temps, too
Bernard Frechtman, an Indianapolis, Indiana-based attorney and author of"Tempnapping" (Twin Pleasures Publishing, 1997) specializes in thestaffing industry. He disagrees with Jorgensen’s claims, and says that anyonewho believes state and federal labor laws don’t apply to employees on tempassignments is seriously misinformed. Frechtman says the courts view thetemporary agency and the client company as "co-employers," which givesworkers legal recourse against both parties. And if a company fails to apply thesame legal guidelines to both their regular and temporary workers, and the tempservice doesn’t take action, both parties will likely be held liable.

NATSS also confirms that temporary workers are protected under U.S.employment laws, including the civil rights laws, worksite safety requirements,minimum wage and overtime provisions. They’re also protected by laws relatedto collective bargaining, workers’ compensation, unemployment insurance, theAmericans With Disabilities Act (ADA), and after working 1250 hours a year, thefamily and medical leave law (FMLA), basically any law that protects a"regular" employee.

Ed Lenz, senior vice president and general counsel of NATSS, adds that theindustry as a whole is investing more dollars in temp training and benefits.Lenz also says that temp wages are on the increase and that it’s a"seller’s market for sellers of skills. We’re currently in the processof surveying our membership in an effort to measure the rate of increase intemporary worker wages in the past six months." Lenz says the most recentNATSS survey data from 1997 indicate that temporary-employee pay rates have beenrising at an even higher rate than the workforce in general, which [according toDepartment of Labor statistics] he cites as having increased 5.6 percent overthe past three years for all workers (inflation-adjusted).

What happens to be at the heart of most temp-advocate issues is the permatemppractice raised in Jorgensen’s report. This is the exact issue that gotMicrosoft into hot water when they kept large numbers of temporary employees onassignment for long periods of time (sometimes years), had control overday-to-day management activities and treated them like full-time workers inevery regard with the exception of compensation and benefits. This, according tofederal appeals court, by definition qualified them as "regularemployees" eligible to participate in Microsoft’s stock-purchase plan andother benefits, a ruling that could cost the software giant tens of millions ofdollars.

In fact, some of Microsoft’s temps have in recent months launched what’sknown as the Washington Alliance of Technology Workers (WashTech), aCommunications Workers of America (CWA) affiliate that’s trying to organizemore than 10,000 permatemps. Most of the members were hired through tempagencies, and work as long as a year without a break on Microsoft’s Redmond,Washington, campus. Many involved with the alliance are potential plaintiffs inthe class-action litigation against Microsoft. One of their goals is to pushthrough a bill to study Washington state’s growing contingent workforce andtheir working conditions -- a bill that, if approved, could trigger similarefforts by other temporary workers who may be contemplating the possibility oforganizing their collective bargaining efforts.

The Microsoft case is one of several that’s being closely watched by NATSS,and by companies using temporary employees as part of their overall staffingstrategy. However, Lenz feels the coverage of the Microsoft case has beenskewed. "Media coverage of the Microsoft case has largely been negative,one-sided and, frankly, misleading." He claims the case isn’trepresentative of a typical staffing arrangement because many of the workerswere initially classified as "independent contractors" and thenshifted to the payroll of staffing firms after the IRS reclassified them asMicrosoft employees. Lenz says that customers should be able to avoid Microsoft’s"fate" if they limit their contacts with the assigned employees to theextent necessary to ensure that the job gets done, and "leave just abouteverything else to the staffing firm so it can fulfill its role asemployer."

Microsoft case could make companies overly cautious
Oddly enough, to Lenz’ point, the suit filed against Microsoft and theresulting publicity may initially lead to practices that further segregate tempworkers from other employees on the job, something that may potentially add totheir second-class status. Ginger Thaxton, president of Creative ManagementConsultants based in Pompano Beach, Florida, specializes in the temp-staffingindustry. Thaxton helps clients maximize their temporary-staffing resources, andsays all eyes are on the Microsoft case.

Thaxton says she’s very concerned about the potential rippling affect ofthe case. "Companies can’t let the ‘Microsoft cloud’ affect theirrelationship with temporary employees. There’s a lot of fear out there rightnow, and if companies pull back and become so cautious with temp workers thatthey further exclude them from activities, this will only create more of a castesystem."

Advice on managing temps is mixed
What should companies do to stay out of trouble without alienating theirtemporary workers? Thaxton believes companies should treat temporary workerslike regular staff if the assignments are kept relatively short-term in length(6 months or less). "You have to treat temps fairly. That means includingthem in social activities, checking on their work and giving them feedback ontheir performance. Otherwise, they’ll feel unimportant."

Lenz, however, feels otherwise. "Integrating assigned employees into thecustomer’s corporate culture by including them in company social activitiesand other functions increases the likelihood that they’ll be considered thecustomer’s employees." Lenz also says customers should avoid recruiting,making wage and benefit decisions and providing training (other thanworksite-specific safety training). Does Lenz believe these decisions will maketemporary workers feel second class?

"Probably not. Most temporary workers report high satisfaction withtheir job experience, and since most work for very short periods of time, theabsence of strong attachments with the customer’s workforce is unlikely to beof great concern." Lenz further supports his point by citing BLS reportsthat indicate 34 percent of temporary employees now prefer temporary work totraditional employment -- up, from 26 percent two years ago.

Darlene Kennedy, director of human resources for Oakley Inc., the FoothillRanch, California-based manufacturer of sporting accessories, agrees more withThaxton’s advice. She strongly believes in treating temporary employees likeregular staff -- including them in social events, managing their performance andcreating a collaborative environment. "We try to do the right thing bymaking the temporary workforce feel like they’re just as important as everyoneelse. They contribute as much to our operations as our regular workers, and ifyou start treating them like outsiders it creates an "us-versus-them"environment, and that doesn’t work here -- teamwork is too important."

Kennedy uses a large number of temporary workers to support their operation,one that’s subject to seasonal highs and lows. During certain times of theyear, Oakley’s temporary staff can balloon up to 500 temps -- almost 30percent of their entire workforce. Kennedy say she tries to convert hernon-seasonal temps to regular employee status after 90 days, and she tries tokeep track of how long temps have been on assignment. Otherwise, she doesn’tworry too much about the potential legal backlash of treating everyone the same.

Managing a blended workforce and keeping workers happy is a complicated job,one that will only grow in complexity as the workforce continues to change. AndHR professionals like Kennedy need to keep their eye on two balls -- one is thelegal exposure that goes hand-in-hand with using temporary workers, and theother is supporting an environment that fosters collaboration and high workperformance for all employees. Kennedy subscribes to a philosophy that helpsguide her actions. "Someone once told me that when you only focus on thelegal issues, and only focus on your exposure, you forget the risk that comeswith dividing and separating the workforce. You have to keep both in mind."Kennedy seems to do a good job of managing this delicate balance.

Workforce, October 1999, Vol. 78, No. 10, pp. 44-50-- Subscribenow!

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