The costs and risks of being a temporary employee are not clear to workers.
Many temps are sent to work without knowing the specifics of what they will be paid, when they will be paid, if the job requires specific safety training or equipment, or even the name of the company where they are being assigned.
In the broadest sense, there is a lack of transparency for all temp workers, who never have a clear understanding of the terms of their employment.
Which agencies have the highest pay?
Which have the best safety records?
Which have the best conversion rates of temporary to permanent?
Temporary employees have no way of obtaining this information. The temporary staffing industry does not share their performance data in ways that would allow workers to make informed, free market decisions.
Furthermore, temps work under contracts that are kept secret from them. These hidden contracts are negotiated privately between the staffing agencies and worksite employers. They typically include numerous clauses that directly affect the terms and conditions under which temps work. For instance, these contracts often:
give the worksite employer the right to terminate any temp worker at any moment, for any reason, or for no reason
set a cap or upper limit on the wage that temps can earn
silence temp workers by preventing them from reporting any problems, or from making any requests, to the worksite employer
put a price on the temp worker’s head by prohibiting the worksite employer from directly hiring the temp without paying a conversion fee
With 50,000 staffing agency offices in the US, walking in the door of one can be the career equivalent of roulette.
BARRIERS TO PERMANENT JOBS
The number one reason for taking a temp job is the desire for it to become permanent.
Direct, permanent jobs are best for workers and best for the economy as a whole. But, the temporary staffing industry maintains artificial barriers to direct employment in the form of "conversion" or "placement" fees. These fees discourage employers from hiring temp workers directly.
Conversion fees are "road blocks" instead of "stepping stones" to good jobs.
The median fee for converting a temporary worker to a permanent employee is 20% of an employee's total gross annual salary, with many staffing agencies charging higher rates.
These placement fees are entirely unregulated and used even in cases where jobs have been advertised as "temp-to-perm."
HIDDEN HOURLY FEES
How much does the staffing agency charge for you?
You have no right to know.
Staffing agencies profit by charging a client company an hourly billing rate and paying a temp worker a lesser hourly pay rate. At the same time, agencies often promote their services as free, claiming, "Never a fee!" But, agencies profit for every hour a temp worker is on the job. The billing rate, the value assigned to the employee, can be many times greater than their pay.
Similarly, union dues are costs taken from workers' pay. Union dues must be clearly communicated with workers and union expenditures are public information. The mandatory costs taken by temp agencies from workers' pay are completely unregulated and are highly secretive.
The temp staffing industry has lobbied intensely to block any legislation that would require temp agencies to disclose the size of their mark-ups or allow temps to see exactly how much user-firms are actually paying for their work.
This lack of transparency drives down wages for workers by reducing their bargaining power and limiting free market competition between agencies.
JOBS THAT DON'T EXIST
Temp agencies frequently post job opportunities on popular job search websites and in classified ads. But, these jobs don't always exist. Often, the advertisements appear to be for direct-hire positions and do not disclose that they are offered through a temp agency. These are attempts to willful mislead you.
These tactics brings job seekers into a temp agency where their resume may be kept on file for their future needs, or where they may be offered a less appealing position. Competition for workers can be stiff between the 50,000 temp agency offices in the U.S., and some resort to unethical or illegal actions to recruit job seekers.
Contact us if you have discovered false advertising or misleading job advertisements and we may be able to help you make a claim.
HOW TEMP AGENCIES HIDE IN PLAIN SIGHT
Michael Grabell - Investigative Reporter, ProPublica