As temporary employment grows, pitfalls seen in Indianapolis

Temporary workers are often in high demand in a shaky economy. Businesses aren’t yet ready to commit to full-time employees, especially when an economic recovery is far from certain.

But in the latest recession and recovery, temporary workers seem even more prevalent than usual. Employment in temporary services grew 8.7% from April of last year to the same month this year, compared with just a 3.5% gain for the broader category of professional and business services over the same period. In some industries such as warehousing and hospitality, a growing minority of workers are contract employees, hired through staffing services with no direct connection to the place they show up for work every day.

A 2009 study by the Labor Relations and Research Center at the University of Massachusetts-Amherst predicted that the temporary staffing workforce in the janitorial industry would increase 29.4% from 2006 to 2016, and that the temporary staffing workforce in shipping and receiving would increase 21.8% in the same period.

But temporary employment agreements can cause problems. In January, workers in Indianapolis filed a lawsuit against 10 hotels, including the Hyatt Regency Indianapolis, and staffing agency Hospitality Staffing Solutions, alleging that the staffing company failed to pay them for the full hours they worked for Hyatt. It also charged that the hotels have agreements in place that prevent them from leaving the staffing service to work elsewhere.

“I have applications in through almost all the hotels downtown, but they say they have a contract with HSS where they’re not allowed to hire me directly,” said Martha Gonzalez, who was hired by Hospitality Staffing Solutions to work at the Hyatt and is a plaintiff in the suit.

She makes $7.25 an hour, Indiana’s minimum wage, and said she can’t find another job because no one else will hire her because of the contract. Hyatt has since been released from the lawsuit, and switched staffing service providers in January.

“The hotel does not have any agreements in place that prevent contract employees from working at other hotels at any time in Indianapolis or elsewhere,” Brian Comes, general manager of Hyatt Regency Indianapolis, said in a statement.

But the conflict may have larger consequences. The Indianapolis City-County Council introduced a bill Monday that would prevent hotels from restricting contract employees from working elsewhere and from working directly for the hotels.

“If you work hard, you earn the opportunity to move ahead in life,” said Maggie Lewis, president of the Indianapolis City-County Council. “This ordinance is about giving hard working hotel workers in Indianapolis the freedom to build a better life for themselves and their families.”

Bills to regulate the temporary help industry don’t usually make it far, said Catherine Ruckelshaus, legal co-director of the National Employment Law Project. Although Illinois regulates the agencies, many other states have recently considered bills that would deregulate the industry, she said.

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