The Free Press, Mankato, MN

State, national news

March 26, 2013

Health law could boost hiring of temp workers

— The health care law could prove to be a boon for temporary-staffing companies as employers outsource jobs to sidestep complex requirements for medical insurance.

But some experts say the Affordable Care Act's exceptions for temporary employees could undercut the goal of expanding coverage to more American workers.

"That could lead to an increase in part-time workers" who lack insurance, said Susan N. Houseman, an economist at the Upjohn Institute for Employment Research who studies staffing companies. "You regulate something and people will always try to find a way around the regulation."

Starting in January, employers with at least 50 workers must offer affordable coverage or pay a penalty. To stay under this limit, some are considering outsourcing jobs to specialists such as Kelly Services, Manpower, Robert Half and Randstad, whose stock prices have soared.

"We are already getting inquiries from our client base for companies in and around 50 [employees], asking us to help them understand this legislation, and to inquire as to how we might be helpful," M. Keith Waddell, Robert Half's president, told investors on a conference call a few weeks ago. "Our response is that we can legally help them remain under 50."

The health law is also prompting larger organizations to use temp agencies. By requiring employer coverage only for those who put in at least 30 hours a week, the act appears to create an incentive for companies to do less with permanent workers and more with part-timers, which are the main focus of staffing agencies.

Manpower is talking to clients about "a more flexible labor model," where workers "might be working 29 hours a week," company chief executive Jeffrey A. Joerres told investors in January, adding: "We definitely look at it as a positive."

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