I want to fire my temp agency

June 17, 2009 4:40 PM

I work through Kelly Services in a long-term temp position at a huge multinational. I got a phone call today from Kelly Services saying they were giving all professional employees at the MNC a 5% pay cut, effective June 29. What can I do -- besides walk?

Though, of course, Kelly Services is claiming that the MNC directed the change, a manager (not my own) at the MNC tells me that is not the case at all. MNC (at least, at this location) has a hiring freeze, but employees have not had pay cuts or layoffs. I would walk out over this, but I have to feed my kids.

I think my boss might be willing to work with me to get around it. My employment is at-will. How would I become an independent contractor? Or come in through another agency? How would I find out whether that is possible? This being a MNC, I can't imagine I'd get too much help from HR, but if I can figure out how to do it, I believe my boss would be willing to undergo some hassle to get this done for me.

Secondarily, another time Kelly Services did something dodgy, with our vacation pay, someone filed a class action lawsuit and I got a notification in the mail that I was part of the class unless I opted out. Is it possible to fight this pay cut? How? Is it significant that we are all getting individual phone calls, but nothing in writing?

Please assume I know nothing at all about negotiation or employment law -- because I don't. Thanks for any advice you can give me. Throwaway email: [e-mail]

posted by anonymous to work & money (17 comments total)

You most likely won't get any help from the MNC, in any way, including being hired on permanently or hired as an independent contractor. Kelly Services requires that its clients sign a contract that restricts the client from re-hiring or hiring any candidate Kelly Services has placed with the client for a set amount of time. If the client hires a candidate within that time period, then the client must pay Kelly Services a set fee (usually a percentage of the candidate's salary).

If I were in your shoes, I'd grumble about the paycut to my supervisor at Kelly but otherwise keep my mouth shut and just keep showing up for work.
posted by LOLAttorney2009 at 4:57 PM on June 17 [1 favorite]

Seconding what LOLAttorney2009 said. You probably don't have much negotiating power to get the 5% back, but you could make a reasonable argument that this means you can work 5% less. By my math, 5% less would be 1 day every four weeks.
posted by Laen at 5:02 PM on June 17

(of course, don't just _take it_. Get it approved with your manager.)
posted by Laen at 5:03 PM on June 17

you or the MNC (maybe both) signed a contract saying you wouldn't go outside official channels to try to cut kelly services out of the deal. kelly gets paid because you work there. they wouldn't be eager to enter into a deal that has them not getting paid. if the MNC was to hire you, it would have to be done under the provisions of the deal they struck with kelly. it seems that is non-starter anyway since your company is under a hiring freeze.

sadly, this seems like something you'll have to suck up until you find a better situation. maybe try to talk to your supervisor at kelly and get an extra day or two of paid vacation, but your chances there are less than slim.
posted by nadawi at 5:05 PM on June 17

Well there's the amount the agency pays you, and the amount they bill MNC.

Typically the agency takes, let's say, 50%. So if you get $20, they invoice MNC for $40/hr and keep the difference. It seems obvious, based on both your description and the unbelievable scumminess of temp agencies, that they are not invoicing MNC any less- they're just keeping another 5%.

If MNC likes and needs you enough, tell them you need the money and ask them to make up the difference. they could call Kelley and say, "we are paying anonymous another 5% now, please add it to our bill."

I can't imagine the agency saying "no" to that, although you never know- the people who work at these agencies are The Worst People In The World. i don't see this being easy- the problem you will encounter is the one you have already run into- everyone giving you the runaround, no one even wanting to admit they created the problem, let alone fix it. but it's worth a try. Sorry this happened to you.
posted by drjimmy11 at 5:09 PM on June 17

drjimmy11 has a point but I'd lay money on the idea that MNC told Kelly to either cut their invoice amount down or be replaced. I've seen that happen with other temp agencies and other vendors. So Kelly might not be pocketing that extra 5%; it could be that MNC is cutting costs and this is one way of doing it. (Still, I would wager that Kelly is passing the cost cutting directly to you, the employee, instead of taking the hit themselves).
posted by LOLAttorney2009 at 5:38 PM on June 17

If they have a huge nationwide contract with this MNC, as I suspect that they do, the "mark-up" they are charging will likely be somewhere between 1.35 and 1.55. Depending on your state (SUTA rates) and their overhead, the expenses to employ you are usually somewhere between 1.26 and 1.3 times your pay rate or so. The rest is profit. The markups are usually much higher for smaller 'retail' accounts - businesses that employ one or two temps and aren't able to negotiate volume discounts.

If MNC calls and tells them that they want you to be paid 5% more, they will do it. They have no reason not to because it will be an increase in revenue....they then will turn around and bill MNC that 5% plus the markup.

The MNC almost certainly did sign a contract promising not to hire you directly (without paying a fee unless a negotiated amount of time passes) or through another source.

/was once in the belly of the beast.
posted by mockjovial at 5:40 PM on June 17 [1 favorite]

In previous situations, I was the client using the temp agency. It was my decision as to the pay scale, and the temp agency then told me the billed amount. If your MNC manager is amenable to getting to the bottom of this, and they are not the source of the pay cut, I believe it could hurt Kelly's standing with their customer if they were indeed just pocketing an extra 5% of your pay. And your MNC manager can easily ask that the difference is made up in their billing.

However, that may not be the case. Your MNC may have directed the 5% cut in Kelly's billing as a first stop in cutting costs before they cut the salaries of their permanent employees. And keep in mind that many, many people are being asked to take pay cuts these days, and in my experience the majority of those requests are for far more than 5%.
posted by raisingsand at 5:43 PM on June 17

I guess I would look at it this way. Assume you earned $100 per week before the pay cut. You now earn $95 after the pay cut.

That 5% discount sucks, but it's still infinitely greater than having no income.

This doesn't really solve your problem, but it's worth thinking about.
posted by dfriedman at 5:45 PM on June 17

There's usually a clause in the contract between the temp agency and the actual company where they can hire you on directly. That involves a "finders fee" of several thousand dollars, minimum. Generally that's enough of a price that the company won't hire you on unless you're critical to their operation. The only way around that is to stop working with the MNC and wait a period of time- 6 mo. to a year maybe, and then get hired directly.

I hate temp agencies too, but I prefer office work to retail or manual labor.
posted by JuiceBoxHero at 7:28 PM on June 17

I know nothing about how Kelley is doing financially, but it could be that the 5% represents neither a reduction forced by MNC nor Kelley suddenly 'pocketing' more money. If their number of overall placed workers has dropped more than they can reduce in house overhead (either due to it happening quickly, or a desire to keep their staff employed) it can result in a higher effective overhead rater for Kelley to operate your account. It is possible that they are attempting to recoup that rate with this new 'policy'.

I concur with the other posters that you don't have a lot of options here. At most if you leave you may be able to argue that it was 'with cause' and retain any rights you might have had to unemployment insurance, but at 5% reduction even that is questionable. It is a tough situation so best of luck.
posted by meinvt at 8:06 PM on June 17

5% of eight hours is 24 minutes. That's two extra 12-minute breaks for you.
posted by Joleta at 8:08 PM on June 17

You probably know who your MNC's competitors are. Go apply for full time jobs working with them.
posted by b1tr0t at 9:04 PM on June 17

I wouldn't raise too much hell directly with the MNC. It seems like, before pay cuts and layoffs, but after hiring freezes, companies will eliminate temps. After all, in a layofff, their direct people will get severance pay, and go against their own unemployment insurance. Temps are going to collect under the agency's name, and won't get severance pay etc.

Raising too much of a fuss over just 5% could bring your name to the attention of people who may be planning the first layoffs right now.
posted by Kellydamnit at 10:10 PM on June 17

You need to read your contract of employment with Kelly Services very carefully indeed. As a general rule, parties are not entitled to unilaterally vary the terms of a contract. This 5% reduction would constitute such variation.

You may find that one of the terms of your contract with Kelly is that they can vary the amount that you are paid. If such a term is absent you can quite legitimately query the basis on which Kelly are purporting to reduce your pay.
posted by dmt at 3:29 AM on June 18

Your manager at MNC says they haven't cut the pay of employees, no mention of contractors. My first thought is that MNC have asked the temp agency to cut their rates at a higher level than your manager and this is simply being passed on to you. In a recession, companies typically cut back on contractors and service providers before their own staff, that's what contractors, consultants and their ilk are for - makes it less of a hassle for them to manage.

Ask for clarification from the temp agency, who are your employer after all. You can tell them that you're not happy, but do so in a constructive manner rather than being aggressive. Figure out what this means for you, and in the meantime use the opportunity to find a better paying job if it's not resolved to your satisfaction. Remember, it's rarely worth burning bridges. Good luck.
posted by arcticseal at 9:45 AM on June 18

I totally agree with arctic seal. At my previous company we had a national contract with a temp agency and renegotiated our contract a couple of times and I wouldn't be surprised at all if the temp agency passed those cuts onto the temps, although I don't remember anyone mentioning it.

We wouldn't have mentioned a temp agency contract negotiation with managers so they would have had no idea that happened where in contrast they would have been told immediately if we were planning on cutting employee salaries so they could be prepared.

Your beef is really with Kelly Services, and while your boss at MNC might be able to argue for a better rate for you, I doubt it will be successful since the rates are probably agreed upon well above his head. You can always discuss with Kelly but, again, I wouldn't expect success. If your boss is really willing to go to the mat for you, it might be more worthwhile for him to ask about hiring you as an employee.
posted by magnetsphere at 11:41 AM on June 18