Exactly. Microsoft and other companies get a tax break by providing some employee compensation in the form of benefits (like health insurance or retirement plans) instead of wages. In exchange for that tax break, they are required to make the benefits available to all of their employees, from the janitor to the software engineer, on the same terms, with certain exceptions (like restricting to full-time workers only). By subcontracting, they can get out of making it available to the janitors or QA testers. The quality of health insurance, for example, offered by any of these outsourcers (not only Lionbridge) is much worse, in premiums, deductibles, and copays, than that of Microsoft or the other tech company actually in charge. And that's if they are offered insurance at all -- if the outsourcer isn't giving them one hour less than the number of hours necessary to qualify for health insurance.
It's a scam. Nothing stops companies from providing different quality levels of insurance to different types of employees; they just have to pay payroll taxes on that compensation. But they've managed to have it both ways -- they're getting the tax break while failing to hold up their end of the deal. The law needs to be retroactively changed to close this loophole and retroactively assess companies FICA tax, interest, and non-payment penalties on the full value of their health insurance, retirement, and other FICA-free benefits if they didn't really make it available to all employees. The result would be a huge tax bill for Microsoft, Google, Apple, Facebook, and everyone else.
Also, Microsoft and other companies need to be on the hook as joint employers, like the union was trying to do. The union was almost certain to win on that at the NLRB under a Democratic administration. There was no hope under a Republican NLRB. In addition to joint employment in the collective bargaining context, we need legislation to implement a very broad, unified joint employment standard (ABC test + Browning-Ferris indirect/potential control) across all federal employment laws, including tax, wage and hour, anti-discrimination, and workplace safety laws. Subcontracting should not be a "get out of jail free" card; every employer in a joint employer scenario should be jointly and severally liable for everything, regardless of their knowledge of the wrongdoing. (Otherwise, you get the "what, we're only paying the contractor $5/hour but we had no idea the contractor was paying its employees less than minimum wage!" issue.)
What about the responsibility of the worker? Everytime I have voluntarily done contracting, I’ve known up front the trade offs.
The last time I was looking for a job, I wanted to contract because everytime I do, I make more money all in. The people I know contracting as QAs were making a killing - they get paid every hour they work and made more than enough to take vacations - most of them did - pay insurance out of pocket, etc.
Full time salaried work and “the benefits” for most of corporate America is not all it’s cracked up to be.
Contracting, not subcontracting. If Microsoft was itself a contractor, I guess you could then use subcontractor here.
Microsoft used to employ janitors directly in its early days, many of them eventually became millionaires. Microsoft and most other American companies decided to outsource non-core work in the late 90s.
On-site contractors are subject to many rules in order to maintain their status, including length of employment, choice of tools, and so on. Offsite...well, that is just treated as company to company transactions right?
It's a scam. Nothing stops companies from providing different quality levels of insurance to different types of employees; they just have to pay payroll taxes on that compensation. But they've managed to have it both ways -- they're getting the tax break while failing to hold up their end of the deal. The law needs to be retroactively changed to close this loophole and retroactively assess companies FICA tax, interest, and non-payment penalties on the full value of their health insurance, retirement, and other FICA-free benefits if they didn't really make it available to all employees. The result would be a huge tax bill for Microsoft, Google, Apple, Facebook, and everyone else.
Also, Microsoft and other companies need to be on the hook as joint employers, like the union was trying to do. The union was almost certain to win on that at the NLRB under a Democratic administration. There was no hope under a Republican NLRB. In addition to joint employment in the collective bargaining context, we need legislation to implement a very broad, unified joint employment standard (ABC test + Browning-Ferris indirect/potential control) across all federal employment laws, including tax, wage and hour, anti-discrimination, and workplace safety laws. Subcontracting should not be a "get out of jail free" card; every employer in a joint employer scenario should be jointly and severally liable for everything, regardless of their knowledge of the wrongdoing. (Otherwise, you get the "what, we're only paying the contractor $5/hour but we had no idea the contractor was paying its employees less than minimum wage!" issue.)