Currently, common law says an employer is someone who supervises an employee at the workplace, while tax and labor laws say that a company must offer eligible employees the same health and pension benefits it offers to other employees at the same level or doing the same work. Furthermore, to make health and pension benefits tax-deductible, the employer must offer them to at least 70 percent of employees. But under the Staffing Firm Workers Benefits Act , the tax code would recognize the employer as the one who pays wages, withholds payroll taxes, hires and fires, and provides benefits. In other words, to save money, a company could simply fire large numbers of workers and shift them to the payroll of a temp employer with inferior wages and benefits. The prospect of this two-tiered benefits structure has unions alarmed.
Organized labor hates the bill, and plans to fight it when it comes up for a vote.
He says the bill will not affect existing labor laws. He agrees the bill will result in reduced benefits for many current full-time permanent employees, who will find themselves switched to the payroll of the temp agencies even though they still sit at the same desks and work for the same boss. They're demagoguing the issue. David Stobaugh is one of the lawyers who represented the Microsoft temps. According to his analysis, the bill could indeed provide companies an incentive to cut labor costs by transferring employees to the payrolls of staffing firms.