Who's the Boss: Restoring Accountability for Labor Standards in Outsourced Work

By Catherine Ruckelshaus, Rebecca Smith, Sarah Leberstein, and Eunice Cho

May 2014

Business outsourcing is on the rise, through practices such as multi-layered contracting, use of staffing or temp firms, franchising, misclassifying employees as independent contractors, and other means. The label on a worker’s uniform and the brand on the outside of the establishment where the work occurs may not match the business name on the paycheck or the company that recruits and hires that same worker.

Lead companies that outsource distance themselves from the labor-intensive parts of their businesses and their responsibilities for those workers. While some of these outsourcing practices reflect more efficient ways of producing goods and services, others are the result of explicit employer strategies to evade labor laws and worker benefits. This restructuring of employment arrangements may well foreshadow a future of work different from the employer-employee paradigm around which many of our labor standards were constructed, but it should not spell the end of living wage jobs or business responsibility for work and workers.

In this report, NELP describes the job structures and impacts on workers in selected outsourced sectors, outlines model policy responses, and proposes a new framework for expanding employer accountability for those in their business.

Related Materials:

Contracted-Work Policy Options: Toolkit of policy models to raise job standards for workers in contracted work structures.

Independent Contractor Costs -- Federal and State Studies: Summary of findings from government and independent research studies on the staggering scope and impact of independent contractor misclassification.

Report: Chain of Greed: How Walmart’s domestic outsourcing produces everyday low wages and poor working conditions for warehouse workers.

Independent Contractor and Subcontracting Materials: From NELP's website.