The Benefit Implications of Recent Trends in Flexible Staffing Arrangements. Staff Working Paper.

Workers in flexible staffing arrangementsincluding temporary agency, direct-hire temporary, on-call, and contract workersare much less likely than regular, direct-hire employees to be covered by laws mandating or regulating workplace benefits. They are also much less likely to receive pension, health insurance, and other benefits on the job. Several factors affect whether and how workers in flexible arrangements are covered by benefits regulations. The first is whether the worker is an employee or an independent contractor. Laws governing benefits pertain only to employees. If the worker is an employee, who is the statutory employer for the purposes of benefits regulation? This issue arises in the context of temporary agency workers, contract company workers, and leased employees who are paid by one employer but perform work for another. Finally, benefit laws typically include hours or earnings thresholds and thus exclude many temporary and part-time workers from coverage. Although reducing benefits costs is not the only reason employers use flexible staffing arrangements, it is an important factor motivating many employers to use them and the level of and growth in these arrangements would be lower in the absence of this incentive. (Appendixes include 29 references, 5 tables, and 1 figure.) (YLB)