Date: Mon, 28 Sep 1998 09:52:33 -0700
From: Tom Patterson <[EMAIL PROTECTED]>
Subject: US temp worker bill (fwd)
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To: [EMAIL PROTECTED]
Subject: OT - permatemps
Hi all,
There's only about a million search engines on the web to find out who your
U.S. congressman is. Please write and let them hear your opposition to this.
I would guess that most people on this list have worked a crappy temp job or
two in their days so I doubt that I have to explain what the standard
"benefits" are of being a temp.
Thanks,
-Emily
"For every dollar the boss has and didn't work for, one of us worked for a
dollar and didn't get it."
-Big Bill Heywood
HR 1891: The Real Deal
The National Association of Temporary and Staffing Services (NATSS) has
introduced a bill in the House of Representatives, HR 1891, designed to
legalize and encourage permatemping (long term temping without any
guarantee of permanent, benefited work).
HR 1891 stipulates that qualified staffing firms (temp agencies) are the
employer for purposes of all federal withholding: income taxes, social
security taxes, and federal unemployment taxes. Is there anything wrong
with this? NATSS claims that staffing firms need to be the employers for
those purposes in order to legally withhold taxes and provide benefits such
as health insurance to temp workers. We would all applaud the bill if it
were actually designed to provide health insurance and pensions to temp
workers. But like so much of what temp agencies do, the claim is UNTRUE: HR
1891 actually makes it easier for temp agencies and their corporate clients
to evade their responsibility to provide benefits to employees.
Temp agencies already pay withholding taxes for temp workers. But they are
afraid of the implications of a court case named Vicaino v. Microsoft. In
Vicaino v. Microsoft, contingent workers (contract employees) were found to
have a right to participate in various benefit plans as employees. The
circuit court reached this decision after an IRS audit of Microsoft
determined that the company should have been withholding and paying taxes
because the workers were employees, not independent contractors. The IRS
made this determination by applying common law principles that are also
common sense. And the circuit court opinion suggested that the same common
sense principles applied to temp workers. So, the temp agencies introduced
HR 1891 which legalizes permatemping.
The Microsoft case gave the temp agencies and other staffing organizations
reason to fear. If contract workers are in truth employees, then what about
permatemps? So NATSS drafted HR 1891 and set out to make permatemping
legal. The first step was to make sure that temp agencies are responsible
for withholding federal taxes.
HR 1891 facilitates the practice of slamming. Slamming is what happens to
an employee who on Friday is a permanent employee of a corporation and on
the following Monday is employed by a temp agency. HR 1891 makes it
possible to move employees from permanent jobs to temp jobs with the stroke
of a pen, allowing employers to wash their hands of their responsibilities.
HR 1891 encourages permatemping. Under current law, employers are required
to include leased employees who work for them for a year or more when they
figure out who gets benefits like health, accident, and life insurance or
pension (e.g., 401(k) benefits). The tax law requires employers to do this
because the money used for benefits is deducted from taxes. It would be
unfair if only the highest paid managers received benefits that were
subsidized by taxpayers. The tax laws, therefore, mandate that all
employers to include all employees in their benefit plans while giving a
fair share of profits to every employee.
HR 1891 changes current law. It allows the temp agency to cover all leased
employees under a separate benefit plan if it wants to do so. As a result,
leased employees who work for a corporation for more than one year or
longer must be included in the company's benefit plan. It would allow temp
agencies and their corporate clients to outsource up to 20% of the
corporation's permanent, full-time employees. These new "permatemp" jobs
would be filled by temps, covered by a separate benefit plan maintained by
the temp agency. This also means that the corporation can take their lowest
paid workers and convert them into permatemps. Since permatemps will not be
included in their own benefit plan, they can give better benefits to
managers and owners.
But doesn't this legislature do what NATSS advocates? Give benefits to temp
workers? NO! Only by depriving workers of better benefits offered by the
client company, the temp agencies allow their personal profits to soar. The
client corporation would offer good benefits packages to 80% of its
workers, deduct the cost from their taxes, and let 20% of the corporation's
permanent, full-time employees have a lousy plan via a temp agency. In the
end, the client company would never have to worry about another Microsoft
law suit.
But at least all the temp workers working for a particular temp agency will
get benefits, right? WRONG! Sure, temp agencies want to have employee
benefit plans. Many are small franchises with one owner. If the owner can
get benefits subsidized by the taxpayer, all the better. But temp agencies
do not respect or care about their own workers. The bottom line for all
temp agencies is profit -- with total disregard to employee
satisfaction, employee benefits, etc. Under HR 1891, temp agencies would be
permitted to carry multiple benefit plans. Some temps can be covered by
bargain basement benefit plans to protect their employers from lawsuits.
Other temps in the same agency do not have to have any plan under HR 1891.
Meanwhile, a temp agency would maintain a separate plan that covers only
its office staff (assignment managers, payroll, etc.) and owner.
HR 1891 does NOT give benefits to temp workers. Its purpose is to deprive
temps of the right to participate in temp agency benefit plans. The temp
agencies want to have their cake and eat it too. And they want someone else
-- taxpayers -- to grow the wheat, mill the flour, bake the cake, and foot
the bill. Hence, HR 1891 was born.
DON'T LET THIS BILL PASS, OR YOU MIGHT WAKE UP A TEMP WORKER!
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