The Free Press, Mankato, MN

State, national news

March 26, 2013

Health law could boost hiring of temp workers


Under the health law's mandate that everybody be insured, temp workers without insurance must pay a penalty or seek coverage in state-based marketplaces known as exchanges. Because of the lower wages typically paid by staffing agencies, temps will likely be eligible for tax credits or Medicaid.

Kelly chief executive Carl Camden downplays the idea that employers will shed health coverage liabilities by using staffing companies. He sees clients' adjustment to the health act as "a modest opportunity" for his company.

"There is a portion of the staffing industry who think there will be a large amount of companies trying to avoid obligations under the ACA and trying to shift over to staffing firms," Camden said in an interview. "I don't see that as happening."

Manpower and Robert Half declined to make officials available for interviews.

The bigger business may be helping companies navigate the law through consulting or by taking over temporary jobs they already have, Camden and other industry officials say.

"We expect that clients that have those kinds of workers and who are daunted by the complexity of the Affordable Care Act will look to staffing firms to help them manage those kinds of workers," said Edward A. Lenz, senior counsel for the American Staffing Association, a temp company trade group.

Staffing company share prices have shot up, partly in response to the recovering economy and partly because of hopes for a surge in Affordable Care Act business, industry analysts say. Manpower has risen by half since November while Kelly, Randstad and Robert Half are all up more than 35 percent, far more than the market as a whole.

A few years ago, when Massachusetts implemented its own requirement that companies provide health coverage to full-time workers, temp jobs increased six times faster than in the country as a whole, said Jeffrey Silber, who follows staffing company stocks for BMO Capital Markets.

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