This is not your grandfather’s workplace anymore. It isn’t even your father’s workplace. Work has changed dramatically in the past 30 years and not just technologically. Whether it is in construction, manufacturing or other industries, it has become increasingly common for employers to contract out work, moving anything other than their core operations to outside and independent contractors. However, this trend has major implications on the health and safety of employees.
Contracting can be a competitive strategy for employers when work is given to the lowest bidder or when independent contractors don’t pay for health and safety items such as workers’ compensation or road security. This competitive environment puts pressure on subcontractors to do more with less, which provides an incentive to violate labor laws – everything from wage and hour laws to safety and health laws. This process is what David Weil refers to as the fissured workplace in his new book The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It. Weil goes on to argue that fissuring is so embedded in the marketplace that many employers, such as those in the fast-food industry, would simply go out of business without it.
In his book, Dr. Weil reviews the three types of fissuring: subcontracting, franchising and supply chain. Subcontracting is very familiar to us in the construction industry and there are often good reasons for it. For example, it’s common to hire subcontractors who specialize in performing work that your employees are not trained to do, like electrical work. But in the past few decades, the growth of subcontracting has led to many construction projects being run by “construction managers.” In many cases, construction managers do not even have employees on the worksite; they simply coordinate the job and hire everyone else as subcontractors. This practice reduces the prime contractor’s liability, since any poor work conditions, safety violations or injuries are off their books. But any safety-conscious contractor knows that serious injuries or fatalities on their jobsites – even to subcontractors – reflect poorly on them.
Weil argues that some employers want to have it both ways. They subcontract out work and give a franchisee or outsourced employee very specific requirements and closely monitor the quality of the work, yet they want to wash their hands of any responsibility for work conditions, wages and safety. Weil also contends that some employers intentionally subcontract particularly dangerous jobs, such as a utility company hiring subcontractors to perform repair work during outages. Weil argues that if contractors can specify the quality and closely monitor what gets produced, they are perfectly capable of specifying and monitoring how the work is done. The recent disasters in Bangladesh in the garment industry show what happens when manufacturers take such a hands-off attitude to their subcontractors.
Many books on the economy devote 99 percent of the book to how horrible things are and very little space (usually the last few pages) to generic solutions. Weil’s book, on the other hand, devotes a full third to creative ways to deal with fissuring. He cites, for example, OSHA’s multi-employer worksite policy, developed in the late 1990s, that holds both the subcontractor and the general contractor responsible if the general has control over the worksite and can be considered the “controlling contractor.” He also offers many other approaches, like new state legislation to combat misclassification of employees as “independent contractors.”
In the end, Weil concludes that we need to create a culture where fissuring goes hand in hand with responsible oversight from employers. Fissuring has a role to play when it makes sense to hire specialized skilled workers. But the current practice of excessive subcontracting can encourage labor law violations, harming workers as well as the economy. Weil strongly believes that employers need to take responsibility to ensure their subcontractors follow the rules and make it clear they are willing to pay for compliance. Safety should be a prerequisite in hiring subcontractors and the contractor needs to monitor compliance. More contractors are now coming to this realization. The tide is beginning to turn.
[David Weil was confirmed by the Senate in April to serve as the Administrator of the Wage and Hour Division at the U.S. Department of Labor.]
[Scott Schneider is the LHSFNA’s Director of Occupational Safety and Health.]
