The Shell Game of Contingent Employment

By Darlene Lombos, Sarah Leberstein, and Elvis Mendez, on September 1, 2014

When subcontractors, freelancers, and independent contractors get hurt or abused on the job, these workers are finding it harder to hold employers accountable. This is no accident—it’s a direct result of a neoliberal labor agenda.

In 2011, Host Hotels & Resorts, Inc., a corporate partner of the Marriott hotel chain, used a general contractor that it had hired to renovate guest rooms at the Host-owned Copley Marriott in Boston. A convoluted web of subcontractors emerged, as the general contractor subcontracted the work to several other companies, and some of that subcontracted work was then further subcontracted, with more than a dozen firms working on the same project.

A state-led, multi-agency investigation found that 15 contractors on the project committed a wide array of labor law violations. Workers from a church-sponsored rehabilitation project in Philadelphia were paid only four dollars an hour—just half the state minimum wage—and no overtime, though they were required to work 12-hour days and more than 60 hours per week. All told, contractors failed to report or pay taxes on more than $1 million in wages, and at least one of them failed to maintain workers’ compensation insurance policies for the hazardous work. They misclassified many of the workers as independent contractors, thus evading tens of thousands of dollars more in unemployment insurance taxes, workers compensation premiums, and employer-side taxes, while stripping workers of basic workplace rights.