CWS 3.0: March 6, 2013

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Proposed Oregon Bill to Raise Cost of Contingent Workers

On Feb. 20, Oregon’s House introduced a bill that would prohibit pay discrimination against contingent workers, according to the March issue of the Legs and Regs Advisor. The bill also would preclude staffing firms from charging clients fees for converting a contingent worker to traditional employment status.

The bill, which has been referred to the Ways and Means committee, states that employers may not discriminate in any way in the compensation paid to full-time employees and similarly situated contingent employees. For the purpose of comparing compensation, the bill adds a 30 percent surcharge to the FTE’s gross hourly rate. The surcharge is deemed to be paid to the contingent employee if it is included directly in wages or is offered as part of the cost of health benefits and welfare and retirement benefits.

The bill also would prohibit staffing firms from restricting clients from offering traditional in-house employment to contingent workers or the right of a contingent worker to accept such an offer. Further, the bill would preclude staffing firms from charging clients additional fees for offering permanent employment to an applicant. Fees charged to the worker also would not be allowed.

While the bill would relieve contingent workforce buyers of fees that they otherwise may have agreed to pay to staffing firms, those potential savings will be more than offset by the compensation parity provisions and would require the disclosure of compensation data to staffing suppliers.

If enacted, the legislation’s provisions go into effect on Jan. 1, 2014.

While the European Union has been tackling compensation parity and unrestricted hiring for contingent workers, such efforts have never gotten much traction in the United States, according to the Advisor. Still, any legislative proposal must be taken seriously, buyers in Oregon may want to ask if their suppliers are working with industry associations to educate legislators on the benefits of flexibility in the contingent workforce and the burden such legislation would impose.

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