Taming the Employment Sharks: The Case for Regulating Profit-Driven Labor Market Intermediaries in High Mobility Labor Markets

Abstract:     
The Article presents an argument for reclassifying and regulating commercial staffing agencies, most importantly the temporary help staffing agency. We conclude that a new legal status for profit-driven labor market intermediaries (LMIs) is essential to building a regulatory regime that can end the super-exploitation and second class status of the millions of workers deployed by profit-driven LMIs. The current legal classification of for-profit LMIs - as employers under federal and state laws - is dubious and, at best, incomplete. We argue that the legal status of commercial LMIs is a major factor contributing to the exploitation and second class status of workers deployed in labor markets through profit-driven intermediaries. First, we recount the legal history of profit-driven labor market intermediaries. This begins with the successful labor struggles and legislative efforts that first led to their regulation in the Progressive Era and closes with the campaign by the nascent temporary help service industry to place itself outside state laws which regulated the exploitative fees charged workers for access to the labor market through commercial intermediaries. Second, we contrast the unregulated legal environment for commercial staffing agencies with the extensive federal regulatory regime governing union hiring halls, labor's answer to the temporary staffing agency and the regulated structure of state-supported LMIs representing home health care aides. Based on this, we propose a new legal status for commercial LMIs that can serve as a statutory foundation for the regulation of the job-brokering functions of commercial LMIs by introducing transparency for its deployment functions and creating a legal limit on the 'hidden fees' that commercial staffing agencies charge to deployed temporary workers.

Number of Pages in PDF File: 76

JEL Classification: J40, J42, K31, J51, J58, J60, J68, L19, L60

Accepted Paper Series