Frank Huljev of Palm Medical Group sent me an interesting article on the health and safety risks of using a contingent workforce to perform dangerous jobs. Â The article is based on a study conducted by the Center for Progressive Reform. Â In spite of the dubious name of this organization, it raised some very valid points.
Employers hire contingent workers in order to obtain perceived financial benefits. Â They believe that by hiring contingent workers they can reduce workers’ compensation premiums, and avoid liability for certain claims. Â The study found that employers will exploit contingent workers with law wages, long hours and unsafe working conditions.
The study and its findings merit further consideration.
I am not an advocate for PEOs or professional employee organizations. Â These are entities that can supply banks of employees as the need requires. Â They can also hire your employees and lease them back to you. Â You then pay an hourly amount for workers. Â The PEO takes care of everything else and promises, among other things, lower work comp premiums.
I don’t understand how a PEO can do this assuming it is candid with all of the facts. Â If a PEO hires the workers of a particular factory or workplace, the work comp history of the facility goes with it. Â Thus, the premiums should not reduce unless the rates are pooled with other workplaces with lower work comp rates. Â But if that is the case, the rates of the companies with better work comp histories will rise. Â And if the other companies have better work comp rates, why join a PEO anyway? Â You see why I think there is some slight of hand?
And an employer won’t eliminate liability for other workplace laws. Â For example, the company will be a joint employer for claims of unlawful discrimination and harassment. Â The company might also increase its liability in the event of a workplace injury.
If you contract with a PEO, I urge you to consider carefully the benefits of the arrangement.  Hiring a contingent workforce may not be the cure for your workplace hassles.  I am not saying that staffing agencies  do not provide a valuable and legitimate service.  Rather, I am suggesting that the promises from a PEO may be illusory.