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.

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

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.

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 ontribution 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.

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 *
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

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.

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.

  1. 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.
  2. 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] 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