Considering the current developments and serious impact that has been portrayed by economical performance, a large corporation has now implemented the practice of hiring independent contractors and temporary employees as a means to avoid the cost of employee benefits payment and thereby focus on increasing profits. The decision in Vizcaino verse Microsoft sent a severe surprise wave through the high tech industry, where employers routinely employed temporary workers to fulfill and at the same time meet the unpredictable workforce needs
Laying foundation on the legal distinction between permanent employees and temporary employees, temporary employees are workers who work on a fixed term contract or for a specific period until a specified project is complete while permanent employees are workers who have no specific period that they are supposed to work. A permanent employee works on an employment contract that is permanent and is eligible for benefits offered by his or her employee. Staffs that work on a flexible basis are temporary workers.
Vizcaino's Microsoft demonstrated that certain workers were in the first place hired as independent contractors who were supposed to benefit under Microsoft's 401(k) plan and the Employee purchase stock plan. On the other hand, employment laws cover both permanent and temporary employees. However, because of the nature of their work and period in which they work they are usually denied rights as employees and misclassified as contractors who are independent. The misclassification comes in the difference in duties performed by permanent employees. Temporary employees have to be treated fairly and by Occupational Safety and Health Administration (OSHA), Fair Labor Standards Act (FLSA) and Equal Employment Opportunity Commission (EEOC).
In May 2015 temporary help services reached up to 2.4million jobs which accounted for 2.4 percent of all employment in U.S's private sector (Ajmera & Clinton, 2017). Fluctuations in the business cycles and employment can be indicated by temporary help services, since 1990 the number of temporary employees has been increasing, and this trend is expected to increase according to research. Temporary employees come in handy when a company cannot afford to hire a permanent employee or when in dire need of workforce. Growing companies that have unpredictable workflow can hire temporary employees to fill in the gaps. Temporary employees allow companies to be flexible when permanent employees go on leave or when there is a fluctuation in business.
All employers are required by the Safety and Health Administration to maintain a healthy and safe place of working for their employees. This Act does not only cover permanent employees but also temporary employees. Any employer responsible for unhealthy or unsafe conditions in any workplace will be held responsible for violation of the acts (Ordine & Vella,2017). If a temporary worker is hurt at work, then he or she is eligible to receive compensation. This is a right that is covered for in the acts. The Labor Standards Act regulates employment issues for workers. These issues include their employer's record of their responsibilities, payment for overtime and federal minimum wage. Under this act, both temporary and permanent employees have equal rights concerning nature of their work environment. The Equal Employment Opportunity Commission is an agency that ensures both permanent and temporary employees are not discriminated at their workplace. This is done by enforcing and administering civil rights and laws against discrimination in the workplace.
Some employers hire temporary workers to avoid compensation costs and paying benefits. When an employee uses temporary workers costs incurred by permanent employees like insurance, pension and training are shifted. These employers who hire temporary employees end up saving 15 to 30% in payroll costs. Temporary workers earn low wages than permanent workers in the same occupation. Most temporary workers are younger than the average permanent worker. Most are also female workers who have no professional documents.
It is important to note that employers who use only temporary employees may engage in the long run waste a lot of time and resources in training new employees for a specific task. This can result in low productivity as the employer has to start over with each new employee. An employer may end up in legal troubles for rehiring the same temporary workers in an attempt to avoid paying benefits and compensation that permanent workers enjoy.
Ajmera, R., & Clinton, A. (2017). Current Employment Statistics data and their contributions as key economic indicators. Monthly Lab. Rev., 139, 1.
Balz, A. (2017). Cross-National Variations in the Security Gap: Perceived Job Insecurity among Temporary and Permanent Employees and Employment Protection Legislation. European Sociological Review, 33(5), 675-692.
de Haas, R. M. (1998). Vizcaino v. Microsoft. Berkeley Technology Law Journal, 483-499.
Ordine, P., Rose, G., & Vella, G. (2017). The Effect of Temporary Agency Workers on Wage of Permanent Employees: Evidence From Linked EmployerEmployee Data. LABOUR, 31(4), 415-432.
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