Nonstandard Work Arrangements

January 3, 2017 by John Howard, MD

Who is looking out for workers in nonstandard work arrangements? As the prevalence of nonstandard work arrangements (such as temporary agency, contract, and “gig” arrangements) rises, so do concerns about workplace safety and health among this workforce. A recent article, “Nonstandard work arrangements and worker health and safety ” published in the American Journal of Industrial Medicine describes the major standard and nonstandard work arrangements and the potential managerial, legal, and health and safety challenges associated with nonstandard arrangements. Key points are highlighted below.

Background

In the late 20th century, many firms shifted from the traditional employer–employee relationship toward increasing reliance on nonstandard work arrangements, shifting much of the risk of doing business on the worker [Cappelli, 1999; Karoly and Panis, 2004; Cappelli and Keller, 2012]. This move toward enhanced labor market flexibility has aided firms economically [Ono, 2009], but has also launched a debate about whether this trend has hurt workers, particularly low-wage workers [Hatton, 2013; Weil, 2014; Hill, 2015].

Nonstandard workers are referred to by different names—temporary help, contingent, part-time, on-call, direct hire, agency, contract, app-based, on-demand, free-lancer, and gig workers (those whose work intermediated by a digital online platform) [General Accountability Office (GAO), 2006]. The unifying feature shared by workers involved in nonstandard work arrangements is that they have no expectation of permanence, even if the work is performed well [Stone, 2004]. Independent contractors do not have a legal right to a safe workplace and are not legally eligible for workers’ compensation benefits if they are injured on the job [Berkowitz and Smith, 2016]. Some gig workers do not earn the minimum wage.

An accurate count of the size of the nonstandard workforce is difficult to obtain because of the heterogeneous nature of nonstandard work arrangements and the absence of a “standard” definition of “nonstandard” work [Kalleberg, 2000; Bernhardt, 2014]. In 2005, the last year in which BLS conducted a Contingent Worker Supplement, contingent workers and workers in alternative arrangements together represented a range from 12.5% to 14.8% of total employment [BLS, 2005]. In 2015, the GAO reported in a letter to Senators Murray and Gillibrand that “the size of the contingent workforce can range from less than 5 percent to more than a third of total employed labor force, depending on widely-varying definitions of contingent work” [GAO, 2015]. GAO then estimated that “a core group of contingent workers, such as agency temps and on-call workers, comprised about 7.9 percent of the employed labor force in 2010” [GAO, 2015].

A 2013 study by researchers from the National Institute for Occupational Safety and Health (NIOSH) reported 18.7% of adults work in nonstandard arrangements (i.e., largely jobs that were “temporary”) [Alterman et al., 2013]. A 2015 RAND-Princeton Contingent Work Survey reported that the percentage of workers engaged in alternative work arrangements (as defined by BLS) increased from 10.1% to 15.8% in 2015 [Katz and Krueger, 2016]. In sum, estimates of the nonstandard workforce range from around 8% to 18% of the total workforce.

The proportion of the total workforce represented by the gig workforce remains very small. Workers who provide services through online intermediaries make up less than one percent of the workforce according to the few studies to date of the gig workforce [Dooko et al., 2015; Lehmann, 2015; Katz and Krueger, 2016].

Legal Issues

A significant challenge facing nonstandard arrangement workers and their job providers involves determining which entity, if any, is responsible for providing various job protections to these workers. Two questions often arise. First, is a nonstandard worker an employee or an independent contractor? Employers often label workers as independent but increasingly those labels are being challenged. Second, when a worker is hired by one employer—often a staffing agency—when is the host employer jointly responsible with the staffing agency for ensuring compliance with labor and employment laws? Each law establishing labor standards relies upon a different test for who is an employer of an employee. As a result, an employer may be responsible for safety and health compliance and paying wages for a group of nonstandard workers, even if that employer is not responsible for providing health insurance or pension benefits to those workers [Dau-Schmidt and Ray, 2004]. (See article for specific court cases.)

The misclassification of employees as independent contractors has grown into such a prevalent practice, denying workers critical protections and legal benefits, that the U.S. Department of Labor launched a “DOL Misclassification Initiative,” partnering with 31 states and the Internal Revenue Service to get workers the wages, benefits and protections to which they are entitled as employees [U.S. Department of Labor, 2015]. Denying injured workers coverage under state workers’ compensation insurance can lead to financial ruin for the worker and his or her family, and transfer the costs of injury care to the public when it should be borne by the employer or job provider [Berkowitz and Smith, 2016].

Occupational Safety and Health Issues

In the past 20 years, studies have demonstrated the existence of differential health risks between workers and nonstandard work arrangements. Why these differential risks occur are not entirely clear. Workers in nonstandard arrangements may bear more injury risk because they are assigned more hazardous work and are reluctant to object [Rousseau and Libuser, 1997; Thebaud-Mony, 1999; Boden et al., 2016]. They may lack sufficient general or site-specific safety training [Kochan et al., 1994; Aronson, 1999; Occupational Safety and Health Administration, 2015], or lack access to appropriate personal protective equipment to do the job assigned them without risk of injury or death [Cummings and Kreiss, 2008]. Confusion may exist in part-time, agency, contract, and gig work arrangements, over who exactly bears the responsibility for various aspects of workplace safety [National Institute for Safety and Health, 2015].

Studies of work-related injuries revel higher injury rates among agency workers than standard workers.

Hospital agency nurses in the healthcare industry had higher rates of sharps injuries than their standard co-workers [Aiken et al., 1997];
agency workers in the petrochemical industry had higher rates of injury, especially when they were engaged in maintenance and turnaround procedures [Rebitzer 1995]; and
agency workers had twice the injury rate than standard co-workers in plastics manufacturing industry [Morris, 1999].

In 2005, a systematic review of international, peer-reviewed studies revealed that 7 of 13 reports showed an increased risk of work-related injuries among contingent workers [Virtanen et al., 2005]. In 2006, study of agency and contract workers reported that nonstandard workers had two times the rate of fatal and nonfatal work-related injuries than standard workers [Benavides et al., 2006]. In 2010, a Washington State study of the workers’ compensation claims rate for agency workers found their rate to be double those of standard workers [Smith et al., 2010].

Illness outcomes were found greater in workers in nonstandard arrangements [Benach et al., 2004; Virtanen et al., 2005]. Increased illness morbidity may be related to the lack of paid sick leave benefits for nonstandard workers. Working while sick can increase the risk of injury. Workers with paid sick leave benefits were 28% less likely than workers without access to paid sick leave to sustain a work-related injury [Asfaw et al., 2012].

Safety managers face challenges with a blended workforce of standard and nonstandard workers. Temporary and permanent employees may differ in the training they receive for the job, the protective equipment they are provided, the dangers associated with the tasks they are assigned, and their perception of safety practices [Zohar and Luria, 2005]. See the joint NIOSH/OSHA Recommended Practices for Protecting Temporary Workers.

Next Steps

Steps must be taken to identify the health and safety risks to workers associated with nonstandard work arrangements and develop interventions to mitigate or eliminate those risks. Better definitional clarity is needed to distinguish the standard arrangements from the increasing varieties of nonstandard work arrangements [Bernhardt, 2014; Benach et al., 2016]. Regular, government-based surveillance of the size of the workforce engaged in the various nonstandard work arrangements is also vital to accurately gauge potential health effects. Improved surveillance would also support design of prospective studies of the health effects from nonstandard arrangement as well as lead to effectiveness studies of regulatory, policy, and health and safety interventions [Boden et al., 2016]. The development, evaluation, and validation of tools to measure physical and social exposure variables found in nonstandard arrangements need to be done [Vives et al., 2010, 2015; Benach et al., 2012]. Also needed are health outcome studies and interventions that can prevent work-related and worker injury, illness, and fatalities across the spectrum of work arrangements [Sauter et al., 2002).

In the Third Decade of NORA (2016–2026), NIOSH will convene partners from organizational science, epidemiology, occupational psychology, economics, sociology, law, management, labor health and safety, and worker advocacy to explore models for healthy work design and worker well-being, continuing to address the ever-shifting challenges workers face as they navigate the global economy.

We welcome your ideas on how to best protect nonstandard workers.

John Howard, MD, Director, National Institute for Occupational Safety and Health