The Labor Prospect: Ending the Subcontracting Scam


AP Photo/The Christian Science Monitor, Ann Hermes

Vincent Parry fills out applications for temp for hire and temp work at Careerxchange, on May 15, 2014 in Miami, Florida. 

Welcome to The American Prospect’s weekly roundup highlighting the best reporting and latest developments in the labor movement. 

(Compiled by Justin Miller—Edited by Harold Meyerson

A Guiding Light

Building off of recent guidance on the misclassification of workers as independent contractors, the Department of Labor has now issued clear guidance calling for companies that rely on subcontracting, outsourcing, and staffing agencies to take on more legal responsibility as joint employers. The guidance also comes on the heels of a groundbreaking NLRB ruling that set a new joint-employer standard for purposes of union organizing. The DOL says that many companies act as de facto bosses of subcontracted workers, yet skirt the legal responsibilities of employers, such as overtime pay.

Browning-Ferris Industries, which was the subject of the August NLRB joint-employer decision, is appealing the labor board’s ruling that the company violated labor law when it refused to negotiate with the Teamsters union that represented subcontracted workers in its recycling facility. The company filed its case with the U.S. Court of Appeals for the D.C. District, saying it “strongly believes that it has rights that require vindication.” The NLRB ruling has also triggered a case in New York that alleges the McDonald’s corporation is legally responsible for alleged labor law violations at a franchise where workers were allegedly punished for participating in Fight for 15 action. That case is currently pending.

Walmart Wages

Walmart has announced that its more than 1.2 million U.S.-based employees will receive wage increases next month. The news comes after sustained pressure from labor groups calling out the retail giant for its exploitive working conditions and perpetually low wages. Last year the company hiked its wage floor to $9 an hour and plans to raise that to $10 this year. That move drew criticism from more experienced, better paid Walmart employers who saw no wage increase. Walmart says the new wage increases will lead to better pay across the board for its employees. On average, full-time hourly workers will get a 38 cent boost to $13.38 while part-time workers will receive a 58 cent raise to $10.58, according to reports.  

California $15

SEIU’s United Healthcare Workers West, a local of California’s largest labor union, is filing petition signatures with the state to qualify an initiative on the 2016 ballot that would raise the state minimum wage to $15 by 2021. The development is the latest in a clash between the UHW West and the SEIU state council, which has proposed its own similar ballot measure.  UHW West’s filing could signal a significant blow to the potential for a brokered agreement between the labor groups that would avoid confusion between the two measures.

Propelled by the momentum of other large California cities, including neighboring Los Angeles, the Long Beach city council approved a minimum wage increase to $13 by 2019, and also commissioned a study on the impacts of further raising the minimum to $14 by 2020 and $15 by 2021.


The AFL-CIO is facing pressure to ditch police unions as a measure of solidarity with Black Lives Matter.

The United Auto Workers union hopes that new Volkswagen corporate leadership could ease the path toward unionization at the embattled plant in Chattanooga, Tennessee.

Staffers at Center for American Progress, a liberal think tank, have voted to unionize, and management has voluntarily recognized the union.

At the Prospect…

From our Winter Issue, writing fellow Justin Miller looks into a new strategy to rebuild the Southern labor movement: building urban power hubs. Read more…

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