Staffing Firms Rally to Fight Off Disclosure, Fee Limits Bill

Jun 1, 2011
This article is part of a series called News & Trends.

A coalition of labor unions and immigrant workers organizations is pushing a bill in Massachusetts to overhaul the state’s staffing industry.

If it’s adopted — almost half the state Legislature is listed as sponsors — the bill would impose a number of administrative obligations on staffing firms, and potentially limit some fees while raising costs. It exempts most professional workers, but it would apply to a broad range of workers, including nurses, clerical, blue collar, and similar. Violators could be fined.

Proponents, who were contacted but didn’t respond  are positioning the legislation as a “temp workers right to know bill,” highlighting provisions requiring staffing firms to inform employees for whom they’ll be working, how much they’ll be paid, where they’ll work, and what they’ll be doing.

While on its face benign, other provisions of the bill limit some fees and essentially end temp-to-hire conversion fees. It puts a damper on the practice of shopping good candidates, by prohibiting candidate referrals without job reqs. Out-of-state staffing firms could be closed out of placing workers in Massachusetts unless they had an in-state office.

“There is no such law currently existing in other states,” says Stephen Dwyer, general counsel for the American Staffing Association. “It is more sweeping and more harmful than any, bar none.”

Dwyer and Mark Carlson, president of the Massachusetts Association of Personnel Services, explain that the organizations pushing HB 1393 claim it’s needed to protect day laborers. With many of them immigrants and undocumented, they have sometimes been the victims of unscrupulous employers who pick them at street corners with the promise of a day’s work, but cheat them out of pay.

However, as Dwyer points out, “that’s not the staffing model.” Staffing firms typically vet their candidates in advance, verifying their qualifications before referring them out. While bad apples exist in every barrel, by focusing on staffing firms, Dwyer says the bill “puts the onus on an industry in which the bad operators are outside the industry.”

Indeed, the two examples cited by the proponents involved failure to pay taxes and make workers’ comp payments. Says MassCosh, one of the labor groups pushing the bill, “non-professional temp agencies are creating an underground economy that undercuts hard-working employers, results in the exploitation of workers and steals desperately needed tax revenue from the state’s coffers.”

Though the bill only affects firms doing business in Massachusetts, Dwyer says it has the potential to become law elsewhere. “California could use it as a model,” he says. “It certainly could spread and that’s one of the concerns we have.”

Even without that risk, should the bill become law as written,  it could have repercussions for out-of state firms who place workers in Massachusetts. An Illinois staffing firm, for instance, with a client with operations around the country, might have to forgo Massachusetts placements unless it has or is willing to open an office in that state.

Even if it manages to continue placing workers there, it could see costs rise, since the bill requires staffing firms to pay food and lodging costs should an out-of-state worker arrive and not immediately be put to work.

(Different provisions apply to states that are contiguous to Massachusetts, raising issues about interstate commerce that could end up in federal court.)

Even that seemingly benign disclosure requirement is causing the industry heartburn. It requires as many as 17 different items be disclosed in writing and sent to the employee.

Carlson explained that most of what the bill requires is already part of every firm’s standard operations. Employees obviously have to be told where to report, when, and to whom. What they’ll be doing, how much they’ll be paid, and, the approximate duration of the employment are also passed along, says Carlson.

But with some firms placing dozens of workers  a day — Dwyer said 40,000 temps, on average, are on the job every workday in Massachusetts — “it’s an administrative burden to put everything in writing,” says Carlson, who points out that the industry practice is to handle things by telephone.

“I have a number of people who want to work a day here, a day there,” he says. In some instances, a temp request for a replacement clerical worker or receptionist might last one or two days. The disclosure form would arrive after the job is over.

The cost, too, is an issue. As the number of daily temps placed goes up, so does the work involved in sending each the required disclosure. Passing the cost along to the client isn’t always possible, so, Carlson points out, workers could end up with a lower hourly wage.

With so many of the provisions of the bill having little or nothing to do with curbing abuses of day laborers, Carlson fears that it’s a first step on a slippery slope that could lead to imposing restrictions on the entire employment industry.

“I understand the spirit of the legislation,” he says, “but this is so broad that it pushes us down a slippery slope … The definitions (in the bill) are broadly written, and if they get accepted by everyone, then they can be used in ways to encompass everything we do.”

The Massachusetts Staffing Association, the national organization, and Carlson’s MAPS group are rallying staffing firm owners for a show of force at a hearing June 9th by the Legislature’s Joint Committee on Labor and Work Force Development. Carlson says he hopes to have 100 people there to educate the officials on what staffing firms do and how they work.

As for policing the bad apples and protecting the day laborers, the ASA’s Dwyer says laws already on the books in Massachusetts are adequate. They just have to be enforced.

This article is part of a series called News & Trends.
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