Temporary Tribulations
When is a temp not a temp? That’s the riddle bedeviling U.S. employers who want to hire temporary workers but steer clear of potential lawsuits and problems with regulatory agencies. While many European and Asian countries are easing very strong restrictions or bans on temporary workers, often permitting such positions for the first time in an effort to create new jobs, the pendulum in the U.S. is swinging toward more protections for these workers.
The U.S. Supreme Court’s refusal in January to hear Microsoft’s latest appeal in a case brought by former temporary workers may sound the final gong in an extended battle about whether the temps should have been allowed to participate in the company’s stock-purchase plan. Given the huge appreciation of Microsoft’s stock over the years, the court decision favoring the workers could cost the company millions. The Ninth Circuit Court of Appeals decision in Microsoft v. Vizcaino is expected to make it harder for all U.S. employers to deny benefits to temporary and contract workers in the future. A second suit by the workers, seeking medical and retirement benefits, is still unresolved.
Such court battles are a sign that some governments are still struggling to regulate temporary workers. Because of the increasing numbers of temps worldwide, employers are eager to have such issues clarified. In the U.S. alone, the number of temporary workers tripled in a decade, jumping from 800,000 in 1986 to 2.5 million in 1997, according to the New York Times. The American Staffing Association, the industry group for staffing agencies, shows the average number of temps working daily in the U.S. reaching 2.8 million in 1998 and hitting 2.96 million by the third quarter of 1999. Temporary work has also been flourishing in Europe, despite limited deregulation. The International Labor Organization reported temporary employment reached 9.4% of total employment in European Union countries in 1997, as international staffing companies find work for more than 1.2 million people daily. And Japan lifted many of its restrictions on temporary work in 1998.
Resolving the issues surrounding temporary work may not be easy because of the inequities that often exist between temporary and full- time employees. Although the growing number of highly skilled temps are very well paid compared with their full-time colleagues, overall temporary workers in the U.S. earn about 35% less per week on average than full-time workers, according to the U.S. Bureau of Labor Statistics. And some contingent workers do not support or share in the government social-welfare system. As a result, governments and unions are seeking the regulatory framework that both meets business demands for flexibility and answers contingent workers' need for employment protection and social equity.
In the meantime, many companies are doing the best they can to manage temporary workers without falling victim to legal tribulations. In particular, U.S.-based high-tech companies -- where temporary workers have long been a staple -- have been working to avoid the problems Microsoft is facing. For example, IBM and Intel strictly limit the length of time temps can work, according to Rob Enderle, an analyst at the IT advisory firm Giga Information Group. Just two weeks ago, Microsoft decided on that strategy, too. Starting July 1, it will limit its temporary workers to employment of one year at a time, with 100-day intervals in between. "We want to make sure our temporary assignments are true short-term assignments," said Sharon Decker, Microsoft’s director of contingent staffing. "They are bringing the corporate policy in line with the law," said Enderle. "You should never have a temporary person working for more than one year."
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For government data on the U.S. contingent workforce, see
http://www.i4cp.com/bE6BBJ
Information on the temporary staffing industry is available at
http://www.i4cp.com/y8Up1Q
For more information on Microsoft v. Vizcaino, please see
http://www.i4cp.com/2ctV8Q
The U.S. Supreme Court’s refusal in January to hear Microsoft’s latest appeal in a case brought by former temporary workers may sound the final gong in an extended battle about whether the temps should have been allowed to participate in the company’s stock-purchase plan. Given the huge appreciation of Microsoft’s stock over the years, the court decision favoring the workers could cost the company millions. The Ninth Circuit Court of Appeals decision in Microsoft v. Vizcaino is expected to make it harder for all U.S. employers to deny benefits to temporary and contract workers in the future. A second suit by the workers, seeking medical and retirement benefits, is still unresolved.
Such court battles are a sign that some governments are still struggling to regulate temporary workers. Because of the increasing numbers of temps worldwide, employers are eager to have such issues clarified. In the U.S. alone, the number of temporary workers tripled in a decade, jumping from 800,000 in 1986 to 2.5 million in 1997, according to the New York Times. The American Staffing Association, the industry group for staffing agencies, shows the average number of temps working daily in the U.S. reaching 2.8 million in 1998 and hitting 2.96 million by the third quarter of 1999. Temporary work has also been flourishing in Europe, despite limited deregulation. The International Labor Organization reported temporary employment reached 9.4% of total employment in European Union countries in 1997, as international staffing companies find work for more than 1.2 million people daily. And Japan lifted many of its restrictions on temporary work in 1998.
Resolving the issues surrounding temporary work may not be easy because of the inequities that often exist between temporary and full- time employees. Although the growing number of highly skilled temps are very well paid compared with their full-time colleagues, overall temporary workers in the U.S. earn about 35% less per week on average than full-time workers, according to the U.S. Bureau of Labor Statistics. And some contingent workers do not support or share in the government social-welfare system. As a result, governments and unions are seeking the regulatory framework that both meets business demands for flexibility and answers contingent workers' need for employment protection and social equity.
In the meantime, many companies are doing the best they can to manage temporary workers without falling victim to legal tribulations. In particular, U.S.-based high-tech companies -- where temporary workers have long been a staple -- have been working to avoid the problems Microsoft is facing. For example, IBM and Intel strictly limit the length of time temps can work, according to Rob Enderle, an analyst at the IT advisory firm Giga Information Group. Just two weeks ago, Microsoft decided on that strategy, too. Starting July 1, it will limit its temporary workers to employment of one year at a time, with 100-day intervals in between. "We want to make sure our temporary assignments are true short-term assignments," said Sharon Decker, Microsoft’s director of contingent staffing. "They are bringing the corporate policy in line with the law," said Enderle. "You should never have a temporary person working for more than one year."
====================================================
For government data on the U.S. contingent workforce, see
http://www.i4cp.com/bE6BBJ
Information on the temporary staffing industry is available at
http://www.i4cp.com/y8Up1Q
For more information on Microsoft v. Vizcaino, please see
http://www.i4cp.com/2ctV8Q