Subcontracted Workers and Temporary Workers

Business use temp and subcontracted workers to perform all or part of a project that requires production of goods or provision of services. Those subcontracted workers suffering the worst conditions are likely to be immigrant workers. These employer practices are not new phenomena; they have a long history especially in apparel, building services and agriculture. There is much to be learned from earlier efforts to reform "sweat shops" and other labor subcontracting systems. Recently, the use of temporary help agencies and other contingent-worker practices have increased in volume. In addition, they have spread to new sectors, such as high-tech, transportation and health care, some of which have relatively high wage rates.

The use of temp agencies has moved far beyond the notion of a temporary clerical worker who fills in during a permanent employee's sick leave or vacation or for a special short-term project. Labor subcontracting often is used in an effort to reduce labor costs by using a subcontractor who will pay workers less than the larger company would have paid. In many cases, the subcontractors are not paid enough to comply with their legal obligiations toward workers or pay a court judgement. Subcontracting also impedes worker organizing, which is an effective method for workers to achieve economic and political bargaining power. Many employers engaged in subcontracting seek to avoid minimum wage, overtime and other legal responsibilities applicable to "employers, "by characterizing the subcontractor as the sole "employer." The reality in many cases is that the subcontracting company retains substantial control over the work performed by the subcontracted workers because it would not risk take the financial risk of entrusting its business plans to labor contractors.