Temp workers rely on public health care more than Amazon, Walmart employees, study says

By: - December 15, 2022 7:12 am

The report comes days before a controversial bill known as the “temp workers’ bill of rights” is set to be voted on in the Senate. (Photo by New Jersey Monitor)

Workers employed at temporary staffing agencies depend on publicly funded health care like Medicaid at rates comparable to large companies like Amazon and Walmart, according to a new Rutgers University study.

The study found that of the top 40 employers enrolled with NJ Family Care — the state’s Medicaid program — 10 temporary staffing agencies account for 18% of enrollees, while Amazon accounts for 11% and Walmart, 8%.

The data shows New Jersey taxpayers subsidize temporary staffing agencies by more than $20 million annually, the study says.

“When staffing agencies, including and especially some of the largest, pay poverty wages and fail to provide fair pay and reasonable benefits, these agencies save themselves a large portion of normal business expenses and pass the cost of health care onto the public,” the study says. 

Carmen Martino, a professor and director of the Occupational Training and Education Consortium at Rutgers’ School of Management and Labor Relations, compiled the research. It relies on employer-based health insurance reports from the state Human Services Department. 

The study comes days before a controversial bill known as the “temp workers’ bill of rights” is set to be voted on in the Senate.

The measure (S511) would require staffing agencies to pay temporary workers the same wages as permanent workers at the companies where they are placed and would require agencies to inform workers about basic information on their work assignments, including the name of the employer and pay rate.

The bill stalled after Gov. Phil Murphy conditionally vetoed it in September and sent it back to lawmakers with suggested changes, and twice Senate Democrats have pulled it from consideration when it became clear there weren’t enough votes for it to pass.

New Jersey is home to an estimated 127,000 temp workers, who often take labor-intensive jobs in warehouses and factories, the study says. Temp workers, who are largely people of color and migrants, advocates say, are subject to wage theft, dangerous working conditions, and discrimination. 

Advocates for temp workers are ramping up efforts to convince lawmakers to support the bill, saying workers are effectively “perma-temps” because they are intentionally kept on without full-time benefits. Staffing agencies opposed to the bill say it would be a logistical nightmare that would punish employers looking to hire temp workers, and could put staffing agencies out of business.

The New Jersey Staffing Alliance, which calls itself the voice for staffing firms across the state, said in a statement that several elements of the bill would “cause great harm” to the temp staffing industry. For example, the bill would prohibit agencies from charging workers for transportation, which they say will leave temp workers with no way to get to and from job sites.

The Rutgers study disputes that staffing agencies would be hurt by new rules. The study claims the agencies’ reliance on public insurance is the “result of an unwillingness … to meet their employees’ health care needs rather than an inability to do so.”

These agencies “save themselves a large portion of normal business expenses and pass the costs of employee health care onto the public,” the study says.

The bill before the Legislature would alleviate some of the burden on taxpayers because it would require corporations to contract workers at a similar rate to full-time employees doing the same work, the study says. 

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Sophie Nieto-Munoz
Sophie Nieto-Munoz

Sophie Nieto-Muñoz, a New Jersey native and former Trenton statehouse reporter for NJ.com, shined a spotlight on the state’s crumbling unemployment system and won several awards for investigative reporting from the New Jersey Press Association. She was a finalist for the Livingston Award for Young Journalists for her report on PetSmart's grooming practices, which was also recognized by the New York Press Club. Sophie speaks Spanish and is proud to connect to the Latinx community through her reporting.

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