NJ taxpayers are footing a $20 million bill for temp workers’ health care, Rutgers report says

New Jersey residents pay more than $20 million per year to subsidize health care for temporary workers denied the same benefits that permanent, full-time employees get, according to an analysis by a Rutgers University researcher.

The analysis — “Passing the Buck: Temporary Staffing Agencies’ Utilization of NJ FamilyCare” — is unreservedly critical of the conditions temp workers face. Although its calculations focus on the use of public health care, the report also references “unsafe working conditions and rampant wage theft,” low pay for temporary employees and a common policy of charging temp workers for agency-provided transportation to work sites.

The report was released just days before the state Senate was once again scheduled to take up the “Temp Workers Bill of Rights,” which would bar the practice of making unitemized paycheck deductions for costs such as meals or transportation to and from work sites, effectively taking the pay of many workers below the minimum wage. The measure additionally requires temp agencies to pay workers the same as permanent employees at a work site and provide equivalent benefits to those given to regular workers doing the same sorts of jobs. Staffing agencies say that isn’t practical, their clients don’t typically disclose regular workers’ pay and such a rule would ultimately cost jobs.

“Agencies claim that they would be unduly burdened by reform, but they fail to disclose the ways that their existing low-wage model actually shifts significant financial burden to New Jersey taxpayers,” Carmen Martino, a professor and director of the Occupational Training and Education Consortium at Rutgers’ School of Management and Labor Relations, wrote in the report.

The Temp Workers Bill of Rights has been through several iterations. Two versions passed the state Legislature this year; the second was needed because of a clerical error. Gov. Phil Murphy conditionally vetoed the more recent version, seeking more funding and enforcement. A revised bill passed the state Assembly, but stalled in the Senate after a pair of Democrats withdrew support this fall.

Its primary sponsor, state Sen. Joe Cryan (D-Union), said this week he’s confident he has the 21 votes needed for passage — but not all supportive senators have been in attendance during the last few voting sessions.

The bill is now expected to come up for a vote in early February.

“If this legislation was passed, it would move these jobs closer to being livable, living-wage jobs, with benefits,” Martino said in an interview. “To that extent, it would not be New Jersey taxpayers anymore, paying the load for temp workers on health care."

The New Jersey Staffing Alliance said on Facebook this week the repeated delays for the bill prove “that there are still significant flaws in the legislation,” and that a new version should be negotiated. It urged looking to other states for models of legislation that could protect temporary workers from exploitation without overburdening agencies.

In the Rutgers report, Martino cites Department of Medical Assistance and Health Services data collected 2018 — the most recent statistics the agency has made available. He says that year, temporary staffing agencies’ employees accounted for several of the top 40 companies whose employees were enrolled in FamilyCare, the state’s public health care program that serves CHIP, Medicaid and Medicaid expansion beneficiaries.

Together, they accounted for 17.6% of the FamilyCare enrollment — more than any single large employer, and nearly as much as Amazon and Walmart combined, the report says.

We [shouldn't] be looking at the workers who do that work as somehow lesser than the workers who are direct hires who do the exact same work.

Carmen Martino, professor and director of the Occupational Training and Education Consortium at Rutgers’ School of Management and Labor Relations

The 10 largest staffing agencies each had more than 500 employees enrolled in NJ FamilyCare, according to the report. The top four each had more than 1,000.

Many temporary workers are assigned to jobs for years, effectively making them full-time employees without the normal pay and benefits, Martino said. But he argued even those on shorter assignments deserve greater protections and compensation.

“If we’re going to use seasonal labor, if we’re going to use flexible labor … if we're going to use disposable labor, well fine. But that doesn't mean we should be looking at the workers who do that work as somehow lesser than the workers who are direct hires who do the exact same work,” he said.

His report argues staffing is a multibillion-dollar industry, “further demonstrating that temp workers’ poverty wages and reliance on public health insurance is the result of an unwillingness of the staffing agencies and their corporate clients to meet their employees’ health care needs rather than an inability to do so.”

New Jersey is home to an estimated 130,000 temporary workers, who account for about a quarter of the state’s growing warehouse industry.

The Temp Workers Bill of Rights has seen consistent opposition from the New Jersey Staffing Alliance, which recently encouraged agencies to give their employees time to lobby against the bill.

“We're urging that all of you guys do the same, every single person that works for you,” said Roy James, CEO of On Target Staffing, said during a meeting this fall, according to a recording of the meeting obtained by Gothamist. “The more emails we have, the more phone calls we have to the senators, that's really what got us through to not getting this bill passed the last time because they actually said they were getting a lot of heat.”

State Sen. Vin Gopal (D-Monmouth), who’d voted for an earlier versions of the bill but withdrew support for the most recent iteration, told NJ.com in October that he wanted to do his due diligence after a temp agency in his district raised concerns.