New Report: Temporary Worker Agencies Exploit Government Contracts and Tax Credits while Discriminating against Black people and Women

For Immediate Release

12/12/23

Press contact: Lorraine Sands, Legal Organizer, National Legal Advocacy Network (​​lsands@n-lan.org)

New Report: Temporary Worker Agencies Exploit Government Contracts and Tax Credits while Discriminating against Black people and Women

(Chicago, IL)—A newly published report from an Advocacy Network sheds light on predatory and discriminatory practices in the $186 billion temporary staffing industry. The report’s findings are two-fold: on one hand, the report used matched pair testing to find discrimination against Black and female job candidates in Harris County, Texas and Nashville, Tennessee; and on the other, the report discovered that the very same industry benefits from millions, possibly billions, of public dollars in government subsidies that are meant to provide pathways to stability for vulnerable workers and contracts with government entities that would likely not support the industry’s discriminatory hiring practices. The report was published by the National Legacy Advocacy Network (NLAN), Action Center on Race and the Economy (ACRE), and Unemployed Workers United (UWU). NLAN contracted the Equal Rights Center (ERC) for the civil rights testing discussed in the report.

ERC’s research found a pattern of racial and gender discrimination in access to work at temporary staffing agencies in Harris County, TX and Nashville, TN. In Harris County, the ERC found race-based discrimination and/or segregation at five of the ten agencies tested and potential gender-based discrimination and/or segregation at nine out of the eleven agencies tested. In Nashville, the ERC found potential race-based discrimination at three of the ten agencies tested. Many firms were repeat offenders, including Texas based Onin Staffing, Pacesetter Personnel Services and Labor Source.

“We found discrimination against female and Black applicants. As the temp staffing industry becomes an increasingly significant part of our economy, we need to hold the companies who deploy these practices accountable, and ultimately put an end to these discriminatory practices” said Sheila Maddali, Executive Director at the National Legal Advocacy Network (NLAN).

The report finds the temp industry enmeshed with the American government at every level via multi-million dollar government contracts and widespread use of the Worker Opportunity Tax Credit. The WOTC provides tax benefits to employers who hire formerly incarcerated people and others who are at risk for poverty. Ironically, more than ⅓ of these jobs pay less than $10 an hour which put workers squarely below the poverty line in most states. In Texas, 5 of the top recipients of this credit are temp agencies. The report reveals that government contracts are also a major source of revenue for the very same agencies that engage in the discriminatory tactics highlighted in the report. 

“Temporary Staffing Agencies keep Black, Brown, and poor people trapped in an exploitative cycle of “permatemping”, wage theft, poverty, and facing discrimination.” said Veronica Avila, Deputy Director of Worker Campaigns at the Action Center on Race & the Economy (ACRE). “Public money should not be used to uphold the temp industry’s poverty and prison to temporary work pipeline.”

“This report confirms what temporary workers have known all along: staffing agencies are discriminating against workers and driving down wages and working conditions across the South. But workers are organizing to fight back. At the local level, we are calling on the Houston City Council to pass a Temporary Workers Bill of Rights to protect temporary workers’ basic labor rights.”

Claudia Magaña, Campaigns Director, Unemployed Workers United

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The ERC is a civil rights organization that identifies and seeks to eliminate unlawful and unfair discrimination in housing, employment, and public accommodations in its home community of Greater Washington, D.C. and nationwide.The ERC’s core strategy for identifying discrimination is civil rights testing. 

ACRE is a campaign hub for organizations working at the intersection of racial justice and Wall Street accountability. We provide research and communications infrastructure and strategic support for organizations working on campaigns to win structural change by directly taking on the financial elite that are responsible for pillaging communities of color, devastating working class communities, and harming our environment.

Unemployed Workers United (UWU) is building the largest poor and working-class coalition to lead a movement that protests for economic equality, claims back our dignity, and fights for healthcare, education, and basic human rights.

National Legal Advocacy Network (NLAN) is a racial and economic justice organization dedicated to shifting the balance of power towards greater equity in our economy and society by leveraging legal strategies and resources to build worker power.