Temporary employment agencies (also known as staffing agencies) are a relatively new phenomenon. They have exploded onto the scene as a great way of avoiding laws, dodging government regulation and cutting labor costs. States with major ocean ports - like New Jersey and California - have a higher amount of temporary employment agencies than other states, but overall it has become a nationwide issue.
These agencies claim that they are fair and follow all the rules and regulations including the Fair Labor Standard Act (FISA). Agencies say that they are filling a necessary void in the market, doing a good deed and finding work for people who need it most.
They argue that temporary agencies fill personnel gaps that are created with seasonal upsurges, sick or maternity leave, vacations and during times of rapid expansion.
But according to numerous studies, staffing agencies serve a much more insidious purpose: agencies are nothing more than a tool for employers to cut labor costs by dodging taxes and government regulation.
OnTarget Staffing, a temporary employment agency based in New Jersey and Florida, claims that employers using staffing agencies to provide labor to companies save on;
• Withholding taxesAn employer that hires agency labor is not legally responsible for these hired workers - the staffing agency is the one held responsible. And staffing agencies frequently violate current labor law because the laws aren't strong enough.
• Social security
• Unemployment/Workers Compensation
• Payroll Costs
• Recruiting Costs
• Turnover Costs
• Advertising Costs
Current labor laws don't protect undocumented workers, and they don't contain strong whistle blower protections, so too many workers are afraid to stand up for themselves in fear of retaliation. This allows staffing agencies to retain total control, and continue getting away with stealing from workers and refusing to honor safety standards.
More conservative estimates say that on average, staffing agencies steal wages from at least 50 percent of employees, while almost 6 in 10 agency employees have stated that they work in 'unsafe' conditions.
Most of the temporary workers provided by staffing agencies wind up working somewhere along the supply line of common 'big-box' retailers like Wal-mart, Target, and Home Depot.
Until we strengthen labor laws that prevent employers from hiring temporary employees as a way to evade their legal obligations, and provide workers with wage and benefit protections, this problem will continue to threaten the entire American workforce.