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 119^th 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)

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.