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A Study on Temporary, Part-time and Seasonal Employees in Maine

 

 

Section A: Authorization for the Study

 

Senator Neria R. Douglas and Representative Pamela Henderson Hatch of the Labor Committee during the 119th Legislative Session authorized the Department of Labor’s Bureau of Labor Standards to collect the following information:

 

1.                   The number of “leased” employees;

2.                   The number of temporary, part-time and seasonal workers;

3.                   The typical benefits provided to full-time workers and how they compare with typical benefits for other types of workers;

4.                   What cost employers avoid by hiring temporary employees;

5.                   Why employers hire temporary workers;

6.                   Why employees accept temporary employment;

7.                   Whether any state or federal laws affect the ability to keep employees in temporary employment status; and

8.                   Any other information we believed would help the Legislature understand the nature and extent of temporary employment in Maine.

 

 

Section B:           Research Methodology

 

The Bureau of Labor Standards (BLS) initiated contacts with employment agencies, labor organizations, trade associations, research foundations, and state and federal agencies to estimate the number of temporary, part-time and seasonal employees in Maine.

 

Definition of  the employment status under study : Applicable federal and state labor laws were reviewed to ascertain the definitions of the employment groups. 

 

Identifying data sources: Federal, state, private and public data sources were requested and reviewed for data on the employment groups.

 

Section C will provide legal definitions (if available) and an estimate of the employment data for each employment group.

 

 

 

 

 

 

 

 

 

 

Section C:          Results

 

Question #1: The number of “leased” employees in Maine.

 

Definition of a Leased Employee

 

A leased employee is defined by the reporting requirement under Maine laws, Title 26: Labor and Industry, Chapter 13: Unemployment Compensation, Subchapter II: Administration, § 1082: Powers and duties. The employee leasing company shall provide each of its clients with a list that identifies all leased employees by name, social security number and the wages paid to each employee in the preceding calendar quarter. The Client Company as required under § 1082 (7) shall maintain these records[1] .

 

Using this definition and the records maintained by the MDOL Labor Market Information Services and Unemployment Insurance Tax Division, the data for the number of leased employees is available for the past four years (1996-1999).  In addition to the number of leased employees, the Unemployment Insurance Tax Division reported 29 leasing companies operating in Maine with 256 client companies for the year 2000.

 

The number of leased employees for the past 4 years can be found in Table 1.

 

Table 1: The Number of Leased Employees in Maine (1996-1999)

 

Year Reported

1996

1997

1998

1999

Leased Employees

1,086

1,443

1,527

1,657

Total Employment *

444,699

444,674

467,904

481,702

 

* Total Private Sector Employment

 

 

Question # 2A: The number of temporary employees.

 

Definition of a Temporary Employee

 

There are no state or federal labor laws for defining temporary employment status.

The number of temporary employees working in Maine can be estimated from the MDOL Bureau of Unemployment Benefits database. Temporary employment agencies as defined by SIC 7363 (Standard Industrial Classification) are required to submit employees’ quarterly wage reports to the Bureau of Unemployment Compensation[2].  Employees working for a temporary agency are accorded temporary status regardless of the number of hours worked.

Section C: Results (continued)

 

Using this reporting criterion, the number of temporary employees reported to the Bureau of Unemployment Compensation for the past 6 years (1994-1999) can be found in

Table 2.   The limitation of this data source is that it does not include individuals who gained temporary employment on their own. 

 

 

Table 2: The Number of Temporary Employees in Maine (1994-1999)

 

Years Reported

1994

1995

1996

1997

1998

1999

Temporary Employees

5,958

5,906

6,295

7,109

7,477

6,580

 

 

 

Question # 2B: The number of part-time employees.

 

Definition of a Part-Time Employee

 

The State of Maine has no labor laws for defining part-time employment status.  The Federal Bureau of Labor Statistics defines a part-time employee as someone who worked less than 35 hours per week.  Data on part-time employees in Maine can be estimated from the Current Population Survey[3] (CPS).  The Census Bureau conducts the CPS for the Federal Bureau of Labor Statistics. Table 3 describes the number of part-time employees in Maine based on the CPS data.

 

 

 

Table 3: Number of Part-Time Employees in Maine

 

Year/Population group

1994

1995

1996

1997

1998

16 years and over

125,000

130,000

129,000

122,000

122,000

Men

  36,000

  43,000

  39,000

  35,000

  39,000

Women

  88,000

  86,000

  92,000

  87,000

  83,000

 

Note: numbers may not add up to subtotals because of rounding off

 

 

Section C: Results (continued)

 

 

Question # 2C: The number of seasonal workers.

 

Definition of a Seasonal Worker

 

There are no state or federal labor laws for defining seasonal employment status. There are two sources of information that can provide an estimate of seasonal employment in Maine.  Under the Code of Federal Regulations, Title 20 Section 655.100, Subpart B[4], the MDOL Division of Migrant & Immigrant Services provides alien worker certification to employers who want to bring in alien workers to perform seasonal work in Maine. These workers are categorized as either agricultural or non-agricultural seasonal workers. 

 

The data presented in Table 4 reflects the number of seasonal alien workers who have been provided certification.  The limitation of this data source is that it does not include alien workers who are seasonally employed and do not need alien certification.

 

 

Table 4: The Number of Seasonal Workers in Maine (1996-2000)

 

Years Reported

1996-1997

1997-1998

1998-1999

1999-2000

Agricultural

NA

803

1,154

1,704

Non-Agricultural

629

325

294

601

 

 

Question #3: The typical benefits provided to full-time workers and how they

           compare with typical benefits for other types of workers.

 

Definition of benefits

 

The only reference to employees’ benefits is defined under Title 26 MRS Chapter 15: PREFERENCE TO MAINE WORKS AND CONTRACTORS[5].   These are employers’ payment for life, disability, health, dental insurance, income protection or other insurance programs related to employee health and welfare. Employers have the option of providing a wide range of employee benefits. Once these optional benefits are offered and accepted by employees, the proper distribution and management of such benefits are subject to either federal or state regulation.

 

Federal or state labor laws mandate that employers provide certain types of benefits regardless of employment status. Typical employee benefits are described in Table 5 and mandatory benefits are described in Table 6.

 

 

Section C: Results (continued)

 

Federal or state labor laws mandate that employers provide certain types of benefits regardless of employment status. Typical employee benefits are described in Table 5 and mandatory benefits are described in Table 6.

 

Table 5: Typical Benefits Provided by Employers

 

Typical Benefits

Employer’s

Contribution

Employee’s Contribution

Regulating Authority

Health care *

%  

%

Bureau of Insurance

Dental care *

%

%

Bureau of Insurance

Retirement plan *

%

%

USDOL

401K plan *

%

%

USDOL

Life Insurance *

%

%

Bureau of Insurance

Vacation

100.0%

0

MDOL

Sick Leave

100.0%

0

none

Bereavement pay

100.0%

0

none

Profit Sharing

100.0% or %

None

USDOL

 

* The level of contributions to these benefits varies between employers and employees.

 

 

Table 6: Mandatory Benefits Provided by Employers

 

 

Mandatory Benefits

Employer’s Contribution

Employee’s

Contribution

 

Regulating Authority

Federal Insurance Compensation Act (FICA)

7.65%

7.65%

Social Security Administration

Workers’ Compensation

100.0%

0

Workers’ Compensation Board

Unemployment Insurance

100.0%

0

Maine Department of Labor

 

 

The range of benefits received by employees of medium and large private establishments (100 employees or more) is available from the 1997 Employee Benefits Survey[6] (EBS) conducted by

the Federal Bureau of Labor Statistics.  The Employee Benefits Survey is conducted to obtain information on the incidence and characteristics of employer provided benefits. Table 7 provides

a comparison of the level of participation by full time and part time employees in employee benefits programs. The EBS sample covers all private sector establishments employing 100 or more workers. Farms and private households are excluded from the sampling frame. All surveys cover full-time and part-time workers in all 50 states and the District of Columbia.

 

Section C: Results (continued)

 

Table 7: Percentage of Participation in Selected Employee Benefits Programs,

Full-Time Employees by Geographic Region, Medium and Large Establishments, 1997

 

 

Benefits by Region

Northeast

South

North Central

West

National

Part-Time

Paid Time Off

 

 

 

 

 

  Holidays

91

88

91

85

40

  Vacations

96

95

95

95

44

   Personal Leave

32

18

18

13

9

   Funeral Leave

85

75

87

74

34

   Jury Duty

91

88

90

75

37

   Military Leave

54

45

52

36

9

   Family Leave

3

3

3

3

1

   Unpaid Family Leave

94

95

92

91

53

Disability Benefits

 

 

 

 

 

   Paid Sick Leave

65

54

48

59

18

   Short Term Disability

78

49

59

32

18

   Long Term Disability

42

44

42

46

4

Survivor Benefits

 

 

 

 

 

   Life Insurance

86

88

89

84

18

   Accidental Death/Dismemberment

64

66

71

70

13

   Survivor Income Benefits

2

3

11

4

*

Health Care Benefits

 

 

 

 

 

    Medical Care

73

76

78

79

21

    Dental Care

58

52

62

67

16

    Vision Care

23

52

62

67

9

    Prescription Drugs

69

72

74

78

20

Retirement Income Benefits

 

 

 

 

 

   All Retirement

80

79

78

80

34

   Defined Benefit

56

45

54

46

17

   Defined Contribution

52

59

54

63

23

     Savings & Thrift

36

40

35

46

13

     Deferred Profit Sharing

9

12

19

12

7

     Employee Stock Ownership

4

4

3

8

1

     Money Purchase Pension

10

7

6

8

3

     Stock Bonus

*

2

1

1

*

 

 

* Less than 0.5 percent

 

 

 

Section C: Results (continued)

 

Table 7: Percentage of Participation in Selected Employee Benefits Programs,

Full-Time Employees by Geographic Region, Medium and Large Establishments, 1997 (continued)

 

 

Benefits By Region

Northeast

South

North Central

West

National

Part-Time

Cash/Deferred Arrangements

 

 

 

 

 

      With Employer Contributions

43

45

46

53

15

          Salary Reduction

42

44

39

52

15

              Savings & Thrift

36

38

34

45

12

              Deferred Profit Sharing

3

4

3

4

2

              Other

3

1

2

3

1

              Deferral of Profit Sharing

2

1

7

2

*

      No Employer Contributions

9

7

11

11

4

 Income Continuation Plans

 

 

 

 

 

   Severance pay

49

30

32

38

10

   Supp. Unemployment benefits

1

1

13

1

*

 Family Benefits 

 

 

 

 

 

   Employer Assisted Child Care

10

8

10

11

7

   Employer Provided Funds

6

5

8

5

3

    On-Site Child Care

4

3

2

5

5

    Off-Site Child Care

3

1

1

1

1

    Adoption Assistance

12

7

10

14

3

    L/T Care Insurance

7

5

9

10

3

    Flexible Workplace

2

3

3

1

1

Health Promotion Programs

 

 

 

 

 

    Wellness Programs

39

35

39

32

17

     EAPs

61

60

61

62

36

     Fitness Center

24

15

22

25

11

Miscellaneous Benefits

 

 

 

 

 

    Travel Accident Insurance

46

35

48

41

18

Non-production Bonuses

43

39

43

42

17

    Subsidized Commuting

6

3

3

15

2

    Education Assistance

 

 

 

 

 

       Job Related

66

69

69

62

34

       Not Job Related

19

22

22

18

6

Section 125 Cafeteria Benefits

 

 

 

 

 

     Flexible Benefits Plans

13

13

10

14

3

Reimbursement Plans

33

31

31

32

11

     Premium Conversion Plans

6

13

7

1

1

 

* Less than 0.5 percent

Section C: Results (continued)

 

 

Question # 4: What cost employers avoid by hiring temporary employees.

 

The Bureau of Labor Standards considered an anonymous random survey of members from the Maine Association of Temporary & Staffing Services (MATSS), the Maine Chamber of Commerce and the Maine Merchants Association Inc.

 

However, due in part to time constraints, limited resources and issues of client confidentiality, this approach of data gathering was not applicable.

 

Since there are no federal or state labor laws that require an employer to provide the optional typical benefits listed in Table 4, an employer can avoid the cost of not providing these optional benefits regardless of the employment status of their workforce.  However, employers are motivated to offer an array of benefits to compete with other employers to attract qualified and productive workers.

 

 

Question # 5: Why employers hire temporary workers.

 

By consulting with the labor and trade organizations and reviewing existing literature,  the Bureau of Labor Standards is able to provide a balanced view of why employers hire temporary workers.

 

The labor organizations (MSEA/AFL-CIO) contend that there are legitimate reasons where employers can benefit from hiring temporary workers.  Situations cited are when there is a short-term project, when the work to be completed is seasonal in nature or when employers need expertise on a short-term basis.  The labor organizations believe that some employers hire part-time workers for the wrong reasons such as avoiding paying benefits, rotating workers on a long-term basis to avoid permanent status and inhibiting the workers’ ability to join labor unions.

 

According to the Maine Merchants Association, most firms hire temporaries to address temporary workloads, not to avoid paying benefits. 

 

In a survey conducted by RHI Management Resources[7], 1,400 chief financial officers reported that the number one reason for hiring temporary workers is to help their businesses handle short-term projects and peak work periods. Other reasons included alleviating employee absences, saving money and avoiding excessive overtime and burnout among regular employees

 

The American Staffing Association[8] indicated that by hiring temporary workers, companies could get the skills they need to keep fully staffed during busy times.

 

Section C: Results (continued)

 

Question # 6: Why employees accept temporary employment.

 

There are numerous reasons why people accept temporary employment.  The Current Population Survey (CPS) has identified the following two broad categories outlining why people are seeking either temporary or part-time work.

 

a)      At work part-time for economic reasons. 

 

This is sometimes called involuntary part-time.  This category refers to individuals who gave an economic reason for working between 1 to 34 hours.  Economic reasons include slack work or unfavorable business conditions, inability to find full-time work and seasonal declines in demand. Other reasons include being involved in a labor dispute or on maternity or paternity leave.

 

b)      At work part-time for non-economic reasons. 

 

This group includes those persons who usually work between 1 to 34 hours part-time and for non-economic reasons. Non-economic reasons include; illness or other medical condition; child-care problems; family or personal obligations; school or training; retirement or social security limits on earnings; and being in a job where full-time work is less than 35 hours.

 

According to the American Staffing Association, many people choose temporary work as an employment option. The temporary workers can select their work schedule and choose among a variety of diverse and challenging assignments.  Temporary work can provide workers an opportunity to try out a prospective employer and showcase their skills for a permanent job.

 

 

Question # 7: Whether any state or federal laws affect the ability to keep employees in temporary employment status.

 

There are no state or federal labor laws that would prohibit employers from keeping employees in temporary employment status.

 

 

Question # 8: Any other information you believe would help the Legislature understand the nature and extent of temporary employment in Maine.

 

To obtain more accurate assessment of the nature and extent of temporary employment in Maine, and the types of benefits provided to part-time or temporary employees, the legislature might consider funding a survey similar to the Federal Bureau of Labor Statistics Employee Benefits Survey. An alternative is to request that the Federal Bureau of Labor Statistics conduct a state-specific employee benefits survey.

 

 

 

 

 

 

 

Acknowledgements

 

 

 

This report is prepared with the assistance of the following:

 

 

1.      MDOL Division of Labor Market Information Services

 

2.      MDOL Division of Unemployment Compensation Tax

 

3.      MDOL Division of Migrant and Immigrant Services

 

4.      Maine State Employees Association/AFL-CIO

 

5.      Maine Chamber of Commerce

 

6.      Maine Merchant Association Inc.

 

7.      Maine Association of Temporary & Staffing Services

 

8.      Maine Development Foundation

 

9.      The Federal Bureau of Labor Statistics

 

 



[1] Title 26: Labor and Industry: Chapter 13:  Unemployment Compensation

    http://janus.state.me.us/legis/statutes/26/title26sec1043.html

 

[2] Title 26: Labor and Industry: Chapter 2:   Employer Notices, Records, Contribution and Reimbursement Payments and Reports.

   ftp://ftp.state.me.us/pub/sos/cec/rcn/apa/12/172/172c002.doc

 

3.      [3] Maine Department of Labor, Division of Labor Market Information Services

       http://janus.state.me.us/labor/lmis/frdef.htm

 

[4] U.S. Department of Labor: Title 20 Section 655.100

   http://www.dol.gov/dol/allcfr/Title_20/Part_655/toc.htm

[5] Title 26: Labor and Industry: Chapter 15: Preference to Maine Works and Contractors.

   http://janus.state.me.us/legis/statutes/26/title26sec1308.html

 

[6] U.S. Bureau of Labor Statistics: Compensation and Working Conditions

    http://stats.bls.gov/special.requests/ocwc/oclt/ebs/ebbl0017.pdf

 

[7] RHI Management Resources.

   http://www.rhimr.com/

 

[8] American Staffing Association

   http://staffingtoday.net/staffstats/staffingfacts.shtml