Everyone knows somebody who has worked at a job without decent health or pension benefits. Many of these workers don't get benefits because they are called temporary or contract workers even though they've been at the same job for years.
These workers are permanent temporary workers, or permatemps. Many receive no benefits, not even sick days or paid holidays.
Even when they do receive insurance or pension benefits, they are mostly employee-paid, with high deductions, limited benefits, and many exclusions. Even with this coverage, these workers are underinsured. Permatemp pension coverage is equally bad. A typical agency pension contribution is $100 per year to an employee's 401(k) plan.
Permatemps work in every industry, in nearly all occupations. They work in public sector and private sector jobs. They usually are in low-to-middle wage or salary jobs, but even some highly-paid workers are misclassified to deny them benefits given to other workers.
Meanwhile, often working right beside them and doing the same jobs are so-called regular workers who receive better pay and benefits.
The laws on who is an employee and employee classification are spread throughout state and federal statutes and court decisions, with some of the case law dating back more than 100 years. The laws also vary depending on the specific topic; the definitions of employee are different for questions on wages, benefits, unions and collective bargaining, discrimination, and workplace safety, among others.
The most important laws applying to mislabeled workers (permatemps) are in several sources. State and federal court decisions (case law) define what is known as "common law" employment. Common law employment hinges on the question of who controls or supervises the employee. In addition to control, there are numerous other factors: hiring, training, location of workplace, who supplies tools and equipment, etc. This common law is the basis for the IRS's recently simplifed "3-factor" test, and was also the basis for the landmark Microsoft Vizcaino decision. The common law also determines whether employees labeled as "independent contractors" are really employees or true contractors. See Independent Contractor page.
When employees are mislabeled, the most common result is lower pay and the denial of benefits that regular employees receive, including health insurance, retirement and paid sick, holiday and vacation leave. The laws are different for public sector (government) and private sector (companies). When private sector permatemps receive lower pay, less paid leave, or are not allowed to participate in an Employee Stock Purchase Plan, state statutes or state case law may be violated. When private sector permatemps are denied participation in the employer's health insurance or retirement plans because of their label, these benefits are governed by the Employee Retirement Income Security Act (ERISA).
State and local government employee classification, pay and benefits are governed by local ordinances, state statutes, and state court decisions. Federal statutes and court decisions govern federal employees, however it is difficult to bring legal action against the federal government on employment issues.
|(Note: This website is not intended to offer legal advice. For legal advice, please see an attorney specializing in employment law.)|