Microsoft Sets Temp Policy

Microsoft says no temps for longer than one year.

In an effort to quell attacks from union organizers and litigants that it is hiring "permatemps" to avoid paying employee benefits, Microsoft officials have announced that effective July 1, it will limit its temporary workers to working one year at a time.

This new policy is intended to expressly delineate between permanent and temporary employees. Opponents of Microsoft's hiring practices argue that despite their label, Microsoft's "permatemps" share the same characteristics as full time employees and, therefore, should be entitled to the same benefits.

The software giant currently employs an estimated 6,000 temp employees. The new policy means those workers will not be allowed to return for work for 100 days following the one-year time limit.

Microsoft has been the target of two lawsuits filed by temporary workers seeking full-time benefits. The company lost the first case allowing temp workers to purchase Microsoft stocks at a discount rate. The second case, still pending, involves medical and retirement benefits for temp workers. One Microsoft officials says the company has been aggressively hiring temp employees for the last couple of years--35 percent of the last hires were temporary workers. Temp workers with Microsoft will be allowed to apply for full-time positions.

Hiring temporary workers for long periods of time has become an important issue for many companies in the United States and around the world. The benefits of hiring long-term temps are two-fold: First, the hiring company saves money by hiring individuals on a temporary basis barring them from any financial commitment to benefits or retirement for the temporary employee, and second, some temporary employees enjoy the flexibility working on a temporary basis can offer.

More and more companies are choosing to hire temp employees for long stretches of time, and in some cases, companies are replacing full-time employees all together.

The issue extends worldwide. Japan's steady recession forced many companies to turn to temp hires as a cost cutting measure. Over 895 thousand temp workers were dispatched in 1998. A 4.7 percent increase since 1986 making it a record high.

In October 1998, the Labor Department accused media giant Time Warner of improperly using temporary workers. According to the lawsuit, Time Warner, which owns and operates cable networks, publishing, and entertainment companies improperly classified full-time workers as temporary employees or contractors, thereby denying them access to company benefits. Time Warner denied the accusation.

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