Contractors vs. Corporations

The trend is corporations increasingly substituting contractors for full time employees. Besides not having to pay benefits, there is no unemployment security, fewer rights (e.g. medical Leave of Absence), and diminished job security. Use them and drop them – that’s the new mantra. It’s not just the economy, either, as though it’s coming back. There’s a fundamental shift, perhaps spurred by the economic crash, that’s changing the way corporations look at filling roles within the organization.

Mr. Elienberg wasn’t a Comcast employee, but a so-called independent contractor working for a separate company. This month, he sued both companies, for allegedly depriving him and other contractors of overtime pay and benefits by not considering them employees.The case highlights a perennial issue for employers that is gaining new prominence during the recession. Lawyers say employers are trying to avoid hiring full-time employees by tapping contractors, as workers seeking better pay and benefits turn to the courts. – [Wall Street Journal, Oct 19, 2009]

Undoubtedly, this will result not only in the kind of lawsuit being levied against Comcast, but also we’re likely to see pressure from individual contractors to achieve the kinds of rights once associated with unionization – basic rights. To do this, contractors may soon be seeking alternative forms of representation – alternatives to the traditional staffing agency. After all, staffing agencies are essentially the tools of the very corporations driving these changes. They take around half of your income, ensure that you don’t rock the corporate boat, and respond ultimately to the demand not of the individual (you’re not their client, the corporation is) but rather act as yet another corporation in partnership with the very forces reducing worker status and entitlements.

It’s not that being a contractor is undesirable. But being a contractor with no negotiating power isn’t going to fill the gaps for the newly unemployed, and glutting the contractor forces is liable to drive down opportunities and bargaining power for existing contractors. What is needed is perhaps not to defend traditional employment – arguably the corporations are right – traditional pre-depression employment may not just be in decline or recession, it may ultimately be dead – we just don’t see it yet. What may be necessary instead is to elevate and dignify the role of contractors traditionally at the mercy of staffing agencies by replacing staffing agencies with something new – a kind of empowerment engine for free agents. Stay tuned, if you like. This is something some of us are actually working on.