temporary worker

temporary worker, an employee, hired through a specialized employment agency, who generally works less than a year on one assignment, regardless of the number of hours worked per week. Temporary workers (also called “contingency staffing” or “temps”) are utilized to accommodate fluctuations in labor requirements. While these workers may have full-time positions with companies, they are paid by private employment agencies. Such agencies recruit, train, and place temporary staff, and the companies using the temporary workers pay fees to the agencies. Because these workers receive job-specific training, many of these jobs can eventually lead to permanent staff positions.

Temporary services grew from 0.6% of the U.S. workforce in 1982 to 2.7% in 1998, by which time it had become a $60 billion industry; in 1999, about 2.9 million people were working in temporary jobs. Substantial growth in the use of temporary workers began in the late 1980s when changes in federal tax laws forced many employers to reclassify independent contractors as full-time employees, with the result that those firms owed large amounts of payroll taxes from previous years. As a consequence, companies instead began to use temporary workers placed by (and paid by) agencies. In addition, some corporations have laid off large numbers of employees (downsized) and then hired replacement workers through agencies; because temporary workers do not get benefits from the corporation, there is a cost savings to the firm. (Some agencies, however, provide benefits such as health insurance and vacation to the workers they place.) Controversy about benefits developed in the 1990s, when large companies such as Microsoft used temporary workers for long-term, multiyear projects but did not offer them benefits such as stock options. Several class-action lawsuits and federal decisions required Microsoft to offer back benefits to many of these workers.

See R. S. Belous, The Contingent Economy: The Growth of the Temporary, Part-time, and Subcontracted Workforce (1989); K. D. Henson, Just a Temp (1996).

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