Temporary services grew from 0.6% of the U.S. workforce in 1982 to 2.7% in 1998, by which time it had become a $60 billion industry; in 1999, about 2.9 million people were working in temporary jobs. Substantial growth in the use of temporary workers began in the late 1980s when changes in federal tax laws forced many employers to reclassify independent contractors as full-time employees, with the result that those firms owed large amounts of payroll taxes from previous years. As a consequence, companies instead began to use temporary workers placed by (and paid by) agencies. In addition, some corporations have laid off large numbers of employees (downsized) and then hired replacement workers through agencies; because temporary workers do not get benefits from the corporation, there is a cost savings to the firm. (Some agencies, however, provide benefits such as health insurance and vacation to the workers they place.) Controversy about benefits developed in the 1990s, when large companies such as Microsoft used temporary workers for long-term, multiyear projects but did not offer them benefits such as stock options. Several class-action lawsuits and federal decisions required Microsoft to offer back benefits to many of these workers.
See R. S. Belous, The Contingent Economy: The Growth of the Temporary, Part-time, and Subcontracted Workforce (1989); K. D. Henson, Just a Temp (1996).
They may work full-time or part-time, depending on the individual case. In some instances, they are given benefits (such as health insurance), but usually the best treatment is reserved for the permanent employees. It is important to note that not all temporary employees find jobs through a temporary Employment agency. For example, a person can simply apply at a local park for seasonal jobs.
A temporary work agency, or temp agency or temporary staffing firm finds and retains workers. Other companies, in need of short-term workers, contract with the temp agency to send temporary workers, or temps, on assignment to work at the other companies. Temporary employees are also used in work that has a cyclical nature that requires frequent adjustment of staffing levels.
Many temporary agencies specialize in a particular profession or field of business, such as general industrial labor, accounting, health care, technical or secretarial. Some even "specialize" in odd-jobs. Because of the added level of communication between the employer (worksite) and the temporary agency and then finally to the agency's employee these short-term roles can be miscommunicated and cancelled on a whim. The employer (worksite) is paying for a service and can decide to stop that service (labor/skills) at any time.
A temporary agency may have a standard set of tests to judge the competence of the secretarial or clerical skills of an applicant. An applicant is hired based on their scores on these tests, and is placed into a database. Companies or individuals looking to hire someone temporarily contact the agency and describe the skill set they are seeking. A temporary employee is then found in the database and is contacted to see if they would be interested in taking the assignment.
It is up to the temporary employee to keep in constant contact with the agency when not currently working on an assignment; by letting the agency know that they are available to work they are given priority over those who may be in the agency database who have not made it clear that they are ready and willing to take an assignment. A temporary agency employee is the exclusive employee of the agency, not of the company in which they are placed (although subject to legal dispute). The temporary employee is bound by the rules and regulations of their direct employer, even if they contrast with those of the company in which they are placed. For example, if a temporary employee is asked by the company in which they are placed to lift a heavy box, they may respond "I am sorry, my agency does not allow me to perform that task. I wish I could help. Please feel free to contact my supervisor there for more information."
Temporary employees are in a constant state of employment flux because they are never guaranteed consistent employment, nor are they assured of a solid start or finish date for their assignment. A temporary employee's assignment can be ended at any time, even in the middle of its projected time frame, without explanation. This causes potential turbulence in cases of discrimination, which is usually handled internally between the employee and the agency.
The classic permatemp situation results when a worker classified as "temporary" works alongside regular employees doing similar work for a long period. By claiming that the employee is only temporary, the worksite company avoids paying for benefits and employer taxes. Benefits and taxes, such as social security, typically are 33% of the employee's pay. For example, if you made 30k per year as a permanent employee (aka with benefits), approximately 10k would be paid for your health insurance, retirement, employer payroll taxes, etc (in some states sales tax is even paid by the worksite, as the temporary employee's "labor" is considered a sold good). Typically at least that 10k is paid to the temporary agency, who provides little to no benefits to their employee. The worksite company also tangentially benefits because it has no responsibility to the employee — permatemp employees can be fired or laid off at any time, as they have no career service protection or seniority. Temporary employees are often ineligible to apply for jobs open to regular employees.
Drawbacks to temp agencies are as follows:
For example, in 2004, prior to the election some voter registration applications for Democrats were found to be discarded in a trash bin outside of the office. According to the local board of elections, a temp agency was hired to process these applications