The Contingent Employee Benefits Problem

Abstract

In the contemporary American workplace, benefits are a critical a component of overall compensation. American workers look to their employers for such non-salary items as retirement programs, health insurance, sick pay, and paid vacations. However, the costs of such benefits have been rising rapidly and employers have sought ways to avoid paying them. Increasingly, employers have been using various techniques to create a pool of contingent workers who, even if they work side-by-side with the employer's traditional employees, nevertheless receive none of the benefits made available to members of the regular workforce. These contingent employee arrangements include utilizing contract workers, leased staff, and temporary workers hired from agencies such as Manpower. In some instances courts have found that employer contingent workforce arrangements have failed to meet the legal hurdles required for exemption from the obligation to provide workplace benefits, but these decisions do no more than to guide employers in how to properly structure workplace relationships in order to meet their objectives. This article explores the limits of the major court decisions that have restricted the ability of employers to exclude contingent workers from access to benefits made available to regular employees and suggests legislative approaches that should be pursued.