Earlier this month, the U.S. House of Representatives passed two related bills that would give women substantial new rights to challenge employers who pay them less than they pay men for the same or substantially similar work.

The Lilly Ledbetter Fair Pay Act of 2009 would overturn a 2007 U.S. Supreme Court decision that enforced a strict 180-day statute of limitations for filing sex discrimination claims under the Civil Rights Act of 1964. The new law effectively extends the deadline for filing claims by providing that a violation of the law occurs each time compensation is paid if it results from a discriminatory pay decision made in the past. In addition to claims under the Civil Rights Act of 1964, the new law applies to claims of discriminatory compensation under the Americans With Disabilities Act, the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act of 1967.

The U.S. Chamber of Commerce and other business groups oppose the bill, because they argue that it would allow employees to bring discrimination claims decades after the alleged initial act of discrimination occurred.

Another bill, the Paycheck Fairness Act, would make it easier for women to prove violations of the Equal Pay Act of 1963, which generally requires equal pay for equal work. Under current law, employers can justify paying women less than men if they can show that the disparity is based on any factor other than sex—for example, that "market forces" dictate higher wages for men or that a man earned more in a prior job. Under the new law, employers must show that the difference in pay is based on bona fide factors such as education, training, or experience—and that it is related to the position in question and consistent with business necessity. The law also would substantially increase the civil penalties for pay discrimination and allow women to sue for both compensatory and punitive damages.

The Senate voted last week to limit debate on the Ledbetter bill and allow amendments to be proposed, but passage is considered almost certain. Senate action on the Paycheck Fairness Act has not been scheduled. President-elect Obama supports both bills and has said he will sign them if they reach his desk.

Data released Friday by the U.S. Bureau of Labor Statistics show that temporary help jobs dropped significantly in December.

BLS nonseasonally adjusted data—which estimate actual employment—show temporary help employment declined 6.2% from November and was 19.9% lower than in December of last year. Seasonally adjusted data similarly show that temporary help employment fell 3.7% from November and declined 19% from one year prior.

"Temporary employment is unlikely to trough until December 2009," Wall Street analyst Jeffrey M. Silber of BMO Capital Markets Corp. said in a report issued to staffing stock investors last week. However, he suggested that the staffing industry may be about to stabilize. Silber projected little change in the actual number of temporary help employees from December 2008 through December 2009.

"The year-over-year declines in temporary staffing would begin to get 'less worse' in February 2009," he wrote. There will still be slight declines in staffing jobs through the end of the year, he forecasts, but the changes will soon approach single-digit percentages.

BLS also reported Friday that seasonally adjusted nonfarm jobs declined by 524,000. This brings job losses in 2008 to 2.6 million, of which 1.9 million occurred in the past four months. The unemployment rate increased to 7.2% in December from 6.7% in November.

When the 111th Congress convenes this week, Democrats will have decisive majorities in the U.S. House of Representatives and the Senate. Although the party was unsuccessful in gaining a filibuster-proof majority in the Senate, Democrats will control the executive and legislative branches of the federal government for the first time in 15 years. Here are some of the major proposals ASA expects to see over the next two years.

Health Care Reform
Outside of the economy, no domestic issue received more attention from the public during last year's race for the White House than health care reform. Sen. Max Baucus (D-MT) recently unveiled his vision for health care reform. The plan, which is similar to the plan put forth by President-elect Obama during the campaign, has the goal of providing health insurance coverage for all Americans. It includes an individual mandate, an employer "play-or-pay" provision, subsidies for small businesses and individuals, and an expansion of public programs.

Although lawmakers seem poised to engage in a national debate on health care reform sooner rather than later, mounting federal deficits and a slumping economy leave very limited resources available for the government to address systemwide health care reform.

Paid Sick Leave
Because advocates in several states recently have been successful in enacting paid sick leave laws, supporters believe they have enough momentum to enact a federal paid sick leave law. President-elect Obama also endorsed the idea of paid sick leave during his acceptance speech for the Democratic nomination. Given these factors, this could be among the top priorities for the 111th Congress.

Employee Free Choice Act
Since Democrats took over the House and Senate in 2006, labor organizations and their allies in Congress have made the Employee Free Choice Act (also called the "card check" bill) their highest priority. The bill would allow unions to organize a work force simply by getting a majority of employees to sign authorization cards without going through a secret ballot election. The bill would mandate binding federal arbitration if employers and unions can't agree on a contract within 120 days. Unions say the law would allow them to organize millions of additional workers.

Passage in the House is virtually assured, but the outlook in the Senate is less certain.

Federal Agencies
The inauguration of a new president gives his administration the opportunity to make wholesale changes in the execution of federal regulation. In the Obama administration, the National Labor Relations Board will have a Democratic majority and can be expected to adopt a much more pro-labor stance than it recently has taken.

Democrats will definitely control the legislative agenda over the next two years, but they will still need help from Republicans for any major reform legislation to become law. Policy proposals deemed too liberal or expansive in the Senate will likely be subject to a filibuster on the floor, meaning some Republicans would need to join Democrats in agreeing to end debate and hold a final vote.

In 2008, the staffing industry claimed one of its most significant legislative victories ever—a bill clarifying the wage payment obligations of staffing firms doing business in California was signed into law by Gov. Arnold Schwarzenegger.

The law clarifies that the end of a temporary assignment is not a discharge from employment requiring immediate payment of wages. Under the law, staffing firms will be considered to have timely paid their employees upon completion of an assignment if the employees are paid on a weekly basis. The legislation also contains language that will allow staffing firms to opt not to pay weekly in the case of employees whose assignments exceed 90 consecutive calendar days. The law takes effect Jan. 1.

This past year, Washington, DC, became the second municipality—after San Francisco—to require businesses to pay for sick leave. Voters in Milwaukee then followed suit, passing a ballot initiative to require private employers to provide paid sick leave for their employees.

In New Jersey, legislation was signed into law requiring companies to offer six weeks of paid leave to workers wishing to care for a new child or sick relative. Benefits will be paid for partially from employee payroll deductions and partially from state unemployment insurance funds.

Cost concerns expressed by Ohio Gov. Ted Strickland forced labor leaders in that state to withdraw a ballot initiative that would have given paid sick days to most full-time employees in the state.

In Maryland, ASA joined in a coalition with the National Association of Computer Consultant Businesses to support an effort to repeal the $200 million sales tax on computer services that was enacted in 2007.

State legislatures continued to crack down on illegal immigration in 2008, but most of the laws passed this year that focus on employers' obligations not to hire illegal workers appear to have less severe penalties compared with the laws passed in 2007. Several states require employers to use E-Verify, the electronic employment eligibility verification system administered by the U.S. Department of Homeland Security. To review the E-Verify laws for the states in which you do business, visit americanstaffing.net.

Overall economic activity has continued to decline through November, according to the Federal Reserve Board's studies of regional economies (known as the "beige book"). The majority of districts report a weakening of labor market activity. Retailers cut back on holiday season hiring plans due to weak sales expectations. Applicant pools have been rising, which is subduing wage pressures.

Boston Manufacturing firms "report they are dismissing temporary workers, restricting employee travel, or reducing purchases of consulting services."

New York Firms "report widespread deterioration in employment, as well as in business activity. Firms also anticipate further declines in both employment and business activity in the months ahead."

Philadelphia "The outlook among third district businesses is generally not positive," the book said.

Cleveland "Staffing firms reported that job openings were flat to slightly down, with openings concentrated in health care and financial services," according to the report.

Richmond "Both retailers and manufacturers cut employment in recent weeks," according to the report. Additionally, "temporary employment agents reported weak demand for workers in October and early November."

Atlanta District "businesses noted that layoffs accelerated and that hours declined." Also, "apart from some health care and other high-skilled technical positions, most contacts suggested that wage pressures continued to diminish."

Chicago "Further weakness in the demand for labor was expected in retail trade, transportation and warehousing, temporary help, and professional services," the district reported. "Staffing firms reported a decline in demand for their services. However, the demand for skilled labor remained strong."

St. Louis While some manufacturers and service firms plan to hire additional employees, numerous industries cited declining demand and indicated plans to lay off workers, according to the report.

Minneapolis District labor markets continued to weaken, and overall wage increases were modest.

Kansas City "Many contacts indicated wage growth in 2009 would be less than in past years due to uncertain economic conditions and lower forecasted revenue growth," the beige book said.

Dallas "Staffing firms report that they are seeing weakness across a wide range of industries." Additionally, "some positions have been eliminated, and others are taking longer to fill. Demand is mostly for contract work and short-term assignments, while orders for direct hires have dwindled."

San Francisco There have been "job cuts and hiring freezes across a wide range of industries, causing unemployment to rise in most areas. The few open positions have been attracting large numbers of applicants."

Temporary help employment increased 0.7% in September, the second consecutive month of growth, according to nonseasonally adjusted data released Friday by the U.S. Bureau of Labor Statistics.

The ASA Staffing Index, which also is not seasonally adjusted, likewise showed an increase in temporary and contract employment from August to September, rising from 96 to 97. Despite the growth, however, the September index is 11 points lower than at the same time last year. BLS nonseasonally adjusted data show temporary help employment down 9.4% from a year ago. While down from last year, staffing employment has been relatively stable since January, and September marked the third-highest month in temporary help jobs this year, according to BLS.

Taking into account seasonal adjustments, BLS reported that temporary help jobs declined 1.0% from August to September, and are down 9.1% from the same period last year.

BLS also reported Friday that total nonfarm employment declined by 159,000 in September. The manufacturing sector lost the most jobs—51,000—particularly among motor vehicle and parts manufacturers. Retail employment fell by 40,000 over the month, with the largest job losses occurring among department stores and motor vehicle and parts dealers. Construction employment was down 35,000 over the month. Health care grew by 17,000 jobs, which was about half the average monthly gain of the past 12 months. Mining employment increased by 8,000.

The unemployment rate remained unchanged at 6.1%.

The Federal Reserve Board said in last week's report on regional economic conditions (known as the "beige book") that economic activity in July and August was slow in most areas of the country, but signs of stabilization are beginning to emerge. Labor market conditions were mostly unchanged, although a few districts reported some softening.

Boston The overall labor market has improved in the first district, the beige book said, but "filling upper-level positions remains a challenge for most staffing firms."

New York "The second district's economy has shown signs of stabilizing," according to the report. While "the most widespread problem" is the cost of commodities, "finding qualified workers remains a major concern."

Philadelphia Business conditions "remained soft." However, the outlook among manufacturers has markedly improved.

Cleveland Even as economic activity "weakened somewhat" in the fourth district, staffing firms saw an increase in job openings and job seekers. "Job vacancies were greatest in health care and high-skilled manufacturing."

Richmond "Temporary employment agencies noted mixed conditions," though some expect demand to strengthen over the next few months. "High-level information technology, biotech services, life sciences, sales, and administrative support were among those skills most highly sought after."

Atlanta Sixth district contacts continued to describe economic activity in the area as weak.

Chicago Economic activity "remained sluggish" and labor market conditions weakened. "A staffing firm reported that billable hours for professional services such as IT, engineering, finance, and accounting declined from the previous reporting period [June]. The demand for skilled labor in manufacturing, however, remained strong, and shortages of such workers continued to be reported."

St. Louis Overall economic conditions in the eighth district softened since June and early July.

Minneapolis The ninth district economy "was stagnant" in July and August, and "labor markets loosened somewhat" since earlier in the summer.

Kansas City "Economic growth in the 10th district improved slightly in late July and early August," according to the beige book. "Labor markets softened, but some firms continued to report labor shortages."

Dallas "The 11th district economy expanded modestly in late July and August," said the beige book. Demand for staffing services leveled off because clients were cautious to hire in light of a slower national economy, rising costs, and uncertainty over the upcoming elections.

San Francisco "Economic activity in the 12th district remained subdued," according to the report.

Temporary help employment declined 1.2% in June, according to seasonally adjusted data released Thursday by the U.S. Bureau of Labor Statistics. Additionally, the number of jobs reported for May was revised downward by more than 9,000. "Employment services lost 59,000 jobs in June, with half the decline in temporary help services," according to BLS commissioner Keith Hall.

Staffing employment, for the most part, has been declining at an increasing rate on a year-over-year basis since the fourth quarter of 2007. Last month, staffing employment was down 6.9% from its June 2007 level.

While staffing has been decreasing on a seasonally adjusted basis for several months, nonseasonally adjusted staffing employment, as reported by the BLS, has generally remained at the same level since February 2008. Typically, staffing employment increases throughout the course of the year, but these increases have yet to be seen in 2008, causing seasonally adjusted employment to be down on an annual basis.

When the data are not adjusted for seasonal factors, they show that jobs in the staffing industry were essentially flat again in June, up only 0.1%. The ASA Staffing Index, which is not seasonally adjusted, was basically flat during the same period, showing only a one-point decrease from May to June.

Overall, BLS reports that seasonally adjusted nonfarm payroll continued its recent downward trend by losing 62,000 jobs in June. The unemployment rate remained at 5.5% after increasing dramatically—by 0.5%—last month.

On June 30, President Bush signed a bill into law that will extend unemployment insurance benefits by up to 13 weeks. The new law will assist unemployment insurance recipients who have already exhausted their regular benefits.

White House press secretary Dana Perino remarked that the 13-week extension was a compromise. Democrats in Congress had originally wanted a 26-week extension in states with unemployment rates of 6% or higher. The Bush administration finally supported the compromise version, which requires people to have worked for 20 weeks in order to be eligible for the extended unemployment insurance payments.

Perino said, "There's been a slowdown; there are many people looking for a job who haven't been able to find one. Thankfully, our unemployment rates have not been as high as in the past, and so we don't think that we need to do this [extend unemployment insurance benefits] as aggressively."

Under the new law, the extended benefits program terminates March 31, 2009. Extended unemployment compensation benefits will be available to individuals who have exhausted their regular unemployment benefits under state law. The program will provide individuals with up to 13 times their average weekly benefit amount for the benefit year, or 50% of the total amount of regular compensation payable to them during their benefit year, whichever is less. The total cost of the extended benefits program is estimated at $12.5 billion.

The new law also provides $110 million in supplemental funding in the form of grants for state unemployment insurance operations. The grants must be used for unemployment insurance administration costs experienced by the states through Sept. 30, 2008.

State governments are beginning to react to the new law. In New Jersey, for example, labor commissioner David Socolow noted that each week 3,000 residents are exhausting their unemployment benefits. Socolow said that the state labor department will automatically enroll unemployment benefit recipients into the extended program as soon as their current benefits expire. He said that the process will be seamless and automatic, and recipients will not have to apply for the extension on their own.

The Federal Reserve Board said in last week's report on current economic conditions (known as the "beige book") that "economic conditions have weakened since the last report. Nine districts noted slowing in the pace of economic activity, while the remaining three—Boston, Cleveland, and Richmond—described activity as mixed or steady." Staffing firms reported "mixed trends in labor demand" during the period covering March and early April.

Boston In the first district, all reporting firms expressed concern about the economy, but most remain cautiously optimistic.

New York One large staffing firm in the district reported that "hiring activity weakened in March and improved only modestly in early April."

Philadelphia According to staffing firms in the district, "demand for workers grew steadily in the first quarter," but a slowdown in hiring activity is expected by mid-year.

Cleveland The beige book said that district staffing firms "cited a slight increase in the number of job openings, persons seeking jobs, and placements. Demand was greatest in health care and professional business services."

Richmond Staffing firms in the district "continued to report somewhat weaker demand for workers over the past six weeks." Requests for warehouse and distribution center workers fell sharply, while demand for temporary employees with computer and administrative skills remained strong. "Contacts expected demand for workers to pull back further in the months ahead."

Atlanta "On balance, labor markets weakened, with contacts in several industries reporting a pullback in hiring and an increase in layoffs," said the beige book. "Shortages of skilled workers continued to be noted by some contacts, particularly in the health care industry."

Chicago Staffing firms in the district "have recently experienced some slowing in new placements." Shortages of skilled workers were also reported.

St. Louis Economic activity slowed slightly in this district. Hiring plans from service sector industries were mixed.

Minneapolis "Overall, employment markets softened somewhat since the last report" in the district, according to the beige book.

Kansas City Labor markets in the district slowed but continued to show some growth.

Dallas "Orders for temporary staffing services improved from the last report and were better than a year ago" in the district. Hiring activity was strongest in information technology and engineering but was sluggish in manufacturing. "Temporary staffing firms say fees have been rising."

San Francisco According to the beige book, "economic activity in the 12th district appears to have been largely flat on net during the survey period of March through the beginning of April."

For the first time in a year, the staffing industry has stitched together two consecutive months of job growth, according to data released Friday by the U.S. Bureau of Labor Statistics. Temporary help employment, as seasonally adjusted by BLS, had been slowly eroding since peaking in December 2005. But Friday's data on October and November employment showed the strongest staffing industry job growth in nearly two years.

BLS reported an increase of more than 11,000 jobs in November in temporary help services, up 0.4% over October. Temporary help jobs increased by nearly 28,000 in October, up 1.1% over September, which BLS had revised upward by another 2,000 jobs. While the industry may be on the verge of reversing a two-year trend, the job counts for both months remain 1.2% below the same time last year.

Nonseasonally adjusted BLS data show a 0.8% decline in temporary help jobs from October to November, a modest drop considering the average from 1990 to 2006 is -1.2%. October is historically the peak month of the year for the nonseasonally adjusted job count for temporary help. The ASA Staffing Index, which is not seasonally adjusted, was flat for the same period covered by the BLS October and November data. BLS data are subject to significant revision.

BLS also reported Friday that total nonfarm employment increased by 94,000 in November, slightly more than economists had expected. The unemployment rate held at 4.7%.

In what may be a long-awaited reversal of months of slow erosion in staffing industry employment, data released Friday by the U.S. Bureau of Labor Statistics showed marked improvement in several numbers for temporary help services: employment increased in October, and estimates for previous months were revised up.

Staffing industry employment increased by more than 20,000 jobs from September to October, seasonally adjusted, according to BLS. That was the biggest month-to-month increase—by a wide margin—since December 2005. Moreover, BLS revised its August and September estimates upward. The agency routinely revises its preliminary estimates, but this was the first time all year that the revisions increased the job count in the staffing industry. Of the previous 19 months, 15 had been revised down. BLS still estimates temporary help employment fell by some 19,000 jobs in September, but the revised loss was less than originally estimated, and October job growth more than offset September's decline. The net growth with the two months combined, plus a slight increase in temporary help jobs in August, along with the upward revisions of recent months, suggest staffing's sluggishness may be coming to an end.

Staffing employment has slowly eroded over the last two years, according to BLS. October's seasonally adjusted job count for temporary help services was about 79,000—or 3%—lower than the industry's most recent peak in December 2005, and 1.6% less than October of last year. The industry has never experienced so long a period of sluggishness. Previous declines have featured precipitous drops immediately preceding a recession. The current pattern looks nothing like a recession.

Historically, staffing industry employment tends to peak in October. Actual employment in temporary help services (not seasonally adjusted), as reported by BLS last week, reached its highest level since October of last year, but it was still 1.9% lower than last October. The ASA Staffing Index, which is not seasonally adjusted, reached a new high of 109 in October.

As for total nonfarm employment, BLS reported an increase of 166,000 jobs last month. That was more than double the 80,000 consensus estimate of economists, according to the Wall Street Journal, and the biggest increase in five months. "Job gains occurred in professional and business services, health care, and leisure and hospitality," BLS reported. BLS also reported that the unemployment rate remained unchanged at 4.7% last month.

Loyal employees in the U.S. work force are currently outnumbered by employees who are likely to leave their companies in the next two years, according to a new national study. The Walker Loyalty Report for the Workplace found that 36% of U.S. workers are considered "high risk," compared with only 34% who are "truly loyal."

The study, conducted by Walker Information, a research and consulting firm, focused on nearly 3,000 full- and part-time workers at organizations with at least 50 employees. According to the study, when employee loyalty declines, there is a negative impact on workplace performance and results. High-risk employees don't think that they have a vested interest in the success of the company, and are less willing to put in extra time and effort. Their truly loyal counterparts are far more likely to participate in career planning, training classes, and mentoring programs.

However, when companies lose "people who are key to [the] organization, that's when this high-risk [employee] becomes a problem," explains Chris Woolard, senior consultant for Walker Information.

Understanding what drives employee loyalty is the key to overcoming this problem. According to the report, tenure plays a significant role, indicating that employers need to do a better job of hiring and training employees. However, loyalty isn't just decreasing among new employees. The survey reports that loyalty has also dropped in upper management levels since the last survey in 2005. Woolard points out that baby boomers increasingly feel excluded from development opportunities and are joining the ranks of high-risk employees. The No. 1 loyalty driver for employees overall continues to be development, according to Woolard.

"You can't have client loyalty without employee loyalty," says Dan Campbell, chief executive officer of ASA member Hire Dynamics. Campbell says that Hire Dynamics—recently voted one of Atlanta's best places to work—treats employee loyalty as a key factor in the success of the entire company. He attributes the company's success to its culture, which "values employees as assets."

A federal court in New Jersey has ruled that a pregnancy discrimination claim against a staffing firm client may proceed because the temporary employee may be able to demonstrate that the proximity between the notice of pregnancy and termination was sufficient to raise a question for the jury.

The staffing firm placed the temporary employee with the client. After several months on assignment, the client offered the temporary employee a permanent position with the company. The employee declined the offer.

Subsequently, the temporary employee discovered she was pregnant and notified her supervisor. Approximately two weeks later, she was terminated without an explanation. When responding to a later U.S. Equal Employment Opportunity Commission inquiry, the client cited excessive absenteeism as the reason for the employee's termination. The temporary employee contends that she received permission to leave early and some of her absences were excused after presenting a doctor's note.

For the case to proceed, the employee must establish that she is a member of a protected class, that she was performing her job at a level that met the employer's legitimate expectations, that she suffered some form of adverse employment action, and that this action occurred under circumstances that give rise to an inference of unlawful discrimination.

The client conceded that it knew the employee was pregnant but argued that it has no duty to warn a temporary employee of termination under the auspices of at-will employment. The court did not agree, noting that unlawful discrimination is an exception to that doctrine.

Moreover, the court rejected the client's argument that the temporary employee cannot show that her termination occurred under circumstances that give rise to an inference of unlawful discrimination. The court stated that the temporal proximity between the date on which the temporary employee informed the client of her pregnancy and the date of termination (two weeks or less) disproves that argument. Also, the temporary employee was offered permanent employment after the alleged excessive absenteeism. The court held that in meeting the elements of a sex discrimination claim under Title VII of the Civil Rights Act of 1964, the case may proceed.

To read the decision, see Pineda v. Bath Unlimited Inc. 2007 WL 2705150 (D.N.J. Sept. 14, 2007).

It's not computer skills but writing skills that entry-level workers need the most help with, according to a recent survey of human resource professionals.

Of the HR executives who participated in the survey conducted by consulting firm Challenger, Gray & Christmas, 45% named writing skills the area where recent graduates are most deficient. Critical thinking deficiencies and a lack in other skills, such as interpersonal skills and conflict management, tied for second place at 27% each.

Today's college students grew up with e-mail and text messaging, using "shortened syntax, incomplete sentences, and no punctuation…which have undoubtedly eroded the fundamental writing skills needed in most professional positions," says John A. Challenger of Challenger, Gray & Christmas.

"Clients want to see how candidates write," says Diedria Joseph of ASA member company Topp Knotch Personnel. Spelling errors can be indicative of a candidate's attention to detail. "What people read is a first impression," Joseph notes, so it behooves job seekers and their recruiters to review what they write and revise as necessary.

To help further hone their communication skills, Challenger advises, students and young professionals should enroll in courses in history, interpersonal communications, and writing—both technical and creative.

It's not just staffing companies that reported higher employment levels in the second quarter of 2007. In a quarterly survey of more than 100 National Association for Business Economics members, business leaders in various sectors of the U.S. economy indicated that demand for goods and services at their firms increased sharply in the spring months.

"The July NABE Industry Survey showed a pickup in business activity, profit margins, hiring, and capital spending compared to the first quarter," said economist Ken Simonson. "Expectations also brightened for the next few quarters for the economy as a whole and for employment."

Wage increases and skilled-labor shortages became more widespread in the second quarter, according to survey respondents. More than 40% of firms reported that wages and salaries rose in the second quarter, and 40% of respondents reported skilled-labor shortages.

Employment growth at respondents' firms snapped back in the second quarter, as the percentage of firms that added employees hit a one-year high. Expectations about hiring in the coming half-year also improved.

Survey respondents are NABE members who work for private sector companies and industry trade associations. More information about the survey is available at the NABE Web site, nabe.com.

Economic activity continued to expand at a steady pace, the Federal Reserve Board said in last week's review of regional economies (known as the "beige book"). Despite a persisting shortage of skilled labor, employment levels increased in most regions and in most sectors of the economy. Upward pressure on wages for in-demand, high-skilled workers continues to increase labor costs.

Boston Business services firms reported solid growth, particularly in health care, pharmaceuticals, financial services, and technology. "Companies are finding it increasingly difficult to attract and retain quality employees."

New York The district reported a continued moderate economic expansion. The labor market has remained steady, with businesses expecting to increase their payrolls by a faster pace in the second half of the year.

Philadelphia Staffing firms noted a steady increase in the demand for workers and indicated that they expect the upbeat hiring pace of the second quarter to continue into the third quarter.

Cleveland Staffing firms continued to report "positive trends in job openings, with an increase in the number of permanent openings." Additionally, a steady increase in the number of job seekers has been noted since late May. Continued upward pressure on wages is expected.

Richmond Staffing firms reported increased demand, particularly for workers trained in life sciences and business services. The increasingly tight labor market continues "to drive demand for temporary workers."

Atlanta The district reported that "labor markets in most areas remained tight," resulting in increased labor costs. A shortage of skilled workers in health care, education, accounting, and information technology was noted.

Chicago Labor market conditions were reportedly varied by industry and location. Staffing firms reported a decline in billable hours for temporary placements.

St. Louis A continued expansion of select manufacturing and services sectors was noted. Consequently, increased hiring is expected in aerospace and motor vehicle parts manufacturing; business support services; health services; and professional, scientific, and technical services.

Minneapolis Activity in the professional business services sector was higher year-over-year and is expected to expand in the next 12 months. Staffing firms anticipate increased hiring in the third quarter.

Kansas City "Hiring announcements outpaced planned layoffs." A continued shortage of skilled workers in the finance, engineering, retail, and hospitality industries was noted.

Dallas Shortages of skilled workers continue to constrict labor market conditions. Businesses reported a rise in wages "between 3% and 4%." Staffing firms cited increased job orders in accounting, finance, and information technology.

San Francisco The district reported moderate upward wage pressures with increased demand for workers in health care, information technology, and professional business services.

On May 25, President Bush signed into law an emergency war supplemental spending measure that included a provision to increase the federal minimum wage incrementally to $7.25 per hour by July 24, 2009. This is the first increase in the federal minimum wage rate since 1997.

According to the Economic Policy Institute, organized labor's think tank, the first increase in the federal minimum wage, to $5.85 per hour July 24, will raise the minimum wage rate in the 20 states where it is currently $5.15 per hour. In July 2008, the federal minimum wage rate will increase to $6.55 per hour and will boost the minimum wage in 25 states. The last increase, to $7.25 per hour July 24, 2009, will increase the wage rate in 35 states, which will leave 11 states with a minimum wage rate higher than the federal rate—unless state legislatures take action before 2009 to increase their minimum wage rates.

There has been a flurry of minimum wage proposals at the state level thus far in the 2007 session. Approximately 38 states have considered legislation to increase their minimum wage rates.

EPI noted that at the time the federal law was signed, 29 states and Washington, DC, had minimum wage rates in effect that were higher than the federal rate of $5.15 per hour: Alaska ($7.15), Arizona ($6.75), Arkansas ($6.25), California ($7.50), Colorado ($6.85), Connecticut ($7.65), Delaware ($6.65), the District of Columbia ($7), Florida ($6.67), Hawaii ($7.25), Illinois ($6.50), Iowa ($6.20), Maine ($6.75), Maryland ($6.15), Massachusetts ($7.50), Michigan ($6.95), Minnesota ($6.15), Missouri ($6.50), Montana ($6.15), Nevada ($6.15), New Jersey ($7.15), New York ($7.15), North Carolina ($6.15), Ohio ($6.85), Oregon ($7.80), Pennsylvania ($6.25), Rhode Island ($7.40), Vermont ($7.53), Washington ($7.93), and Wisconsin ($6.50). Also this year, the minimum wage in Michigan and Pennsylvania will increase to $7.15 per hour July 1. The minimum wage in Maine will increase to $7 per hour Oct. 1.

EPI estimates 12.5 million workers will receive an increase in their hourly wage rates by 2009. Of these workers, about 5.6 million currently earn less than $7.25 and would be directly affected by an increase. Approximately 7.2 million workers currently earning slightly more than the minimum wage will benefit indirectly because they work for employers that will raise their wages to keep them higher than the federal minimum.

Temporary help employment levels remained essentially unchanged in May, according to data released Friday by the U.S. Bureau of Labor Statistics. The report noted that staffing employment has "shown little movement since its recent peak in December 2005."

Seasonally adjusted temporary help employment, as measured by BLS, has exhibited scant change since January 2006. Staffing employment decreased 0.3% from April to May, and in a year-over-year comparison, employment for the industry was 1.4% below the same month last year.

Nonseasonally adjusted BLS data showed a 2.1% rise in temporary help employment over the month. Similarly, the ASA Staffing Index, which is also not seasonally adjusted, revealed incremental growth in staffing employment over the same monthly period. Since its inception last summer, the ASA Staffing Index has been a successful predictor of nonseasonally adjusted trends in staffing employment as reported by BLS.

In Friday's release, BLS reported that overall seasonally adjusted nonfarm employment increased by 157,000 jobs in May—well above economists' predictions of 135,000 new payroll additions. Job growth predominantly occurred in service-providing industries, specifically in food services and in health care. Manufacturing employment experienced continued declines, particularly in motor vehicles and parts manufacturing.

The overall unemployment rate for May remained at 4.5%, which was consistent with economists' expectations. The jobless rate has varied between 4.4% and 4.6% since September 2006.

Overall economic activity continued to expand moderately, the Federal Reserve reported last week in its studies of regional economies (known as the "beige book"). Most districts noted continued "tight labor market conditions, especially for skilled occupations," with overall "modest" wage increases.

Boston The district reported mixed economic activity in the retail and manufacturing sectors. "Most business contacts are hiring for replacement; skilled positions remain difficult to fill."

New York The beige book reported steady economic growth with some upward pressure on costs and wages. Hiring activity increased despite a shortage of qualified job candidates.

Philadelphia Temporary help firms described an overall increase in the demand for workers with some moderation in hiring in selected areas of the district. Employment costs continued to rise, with several firms noting increased year-over-year growth in benefit costs.

Cleveland Staffing firms reported "positive trends in job openings," with the greatest demand for workers seen in health care, information technology, and accounting. While the number of job vacancies increased in a year-over-year comparison, the number of job applicants has decreased by the same measure.

Richmond District staffing firms described a "generally strong demand for workers," especially with customer service, accounting, and computer skills. The report also cited a continued trend in moderate wage growth for the services sector.

Atlanta Labor markets remained "relatively tight," with continued shortages of skilled workers in parts of the district.

Chicago A continued modest increase in economic growth was noted. Employment agencies observed faster increases in wages for high-skilled positions, while pay rates for low-skilled positions remained flat.

St. Louis Increased expansion in the services sector was accompanied by a continued softening in manufacturing. Increased hiring is anticipated in several administrative and support services industries; conversely, layoffs are planned in several manufacturing industries.

Minneapolis The district reported continued tightening of the labor market, with moderate overall wage increases. Hiring is anticipated in several service industries, including architecture, administrative, legal, accounting, and investment.

Kansas City A solid expansion in hiring was reported, especially in manufacturing and business services. Labor shortages were cited by many firms, specifically in the information technology, skilled manufacturing, service, and energy-related fields.

Dallas Staffing firms reported a rise in demand for their services, with increased job orders from manufacturing firms and continued requests for workers in accounting, administrative, legal, and computer services.

San Francisco Shortages of skilled workers were observed in various sectors, contributing to upward wage pressures.

Employers world-wide say they are having difficulty filling positions because of a lack of available talent. They especially are looking for salespeople, teachers, and mechanics, according to a recent survey by ASA member Manpower Inc.

Some 41% of the 37,000 employers polled across 27 countries reported difficulties in filling positions in 2007—an increase of 1% over the previous year. The percentage of U.S. companies reporting those same difficulties mirrored the global rate. In its white paper Confronting the Talent Crunch: 2007, Manpower states that "unprecedented demographic shifts will be exacerbated by a talent crunch that threatens to stall the engines of economic growth."

The use of flexible talent is one way employers can combat shortages and "accommodate variability in demand," reports Manpower. According to the staffing firm's survey, today's larger companies are already in-the-know about the benefits of temporary employment—they engage "contingent labor" regularly and strategically to promote "work force optimization."

This is true of companies of various sizes and sectors: According to an ASA survey of staffing clients, about half of the companies polled said "their use of temporary and contract employees is an important part of their company's business model."

The growing use of temporary employment helped stabilize the 2006 economy, reported the Los Angeles Times, and helped make Ben Bernanke's first year as Federal Reserve chairman a bit easier.

In a Jan. 31 article about Bernanke, Los Angeles Times reporter Joel Havemann wrote that temporary employment was one element that contributed to the Federal Reserve chairman's fortunate first year in office: "Increasingly common business practices—such as 'just-in-time' inventories and the growing use of temporary employees—have moderated the economic cycle by keeping business from overexpanding and then downsizing dramatically when sales slow."

Havemann's reference to temporary employment reflects the significance that reporters, industry analysts, and the Federal Reserve place on the staffing industry. Bernanke has followed staffing trends throughout his career and has cited dips and gains in temporary employment as indicative of impending economic fluctuations. He follows in the footsteps of the much-revered former chairman, Alan Greenspan, who, in his last monetary policy report to Congress, indicated that he regarded U.S. labor force flexibility as integral to absorbing and mitigating economic disruption.

The Federal Reserve and the Los Angeles Times are just two of more than 1,100 influential policy makers, journalists, scholars, business executives, and industry analysts to whom ASA regularly provides staffing industry news, statistics, and information.

The economy expanded at a "modest pace" from late November to early January with continued tightening of labor market conditions, the Federal Reserve Board's studies of regional economies (known as the "beige book") reported last week. Most districts reported a sustained shortage of skilled labor, particularly in the fields of engineering, finance, and law. Moderate wage gains were also noted, with several districts citing increased costs for employee benefits.

Boston Business activity was reportedly mixed. Despite shortages of skilled labor, firms "are typically adding to the head count only selectively if at all," pointing to wage pressures as a mitigating factor.

New York Moderate economic expansion was observed, with indications of increased cost pressures. Employment activity was reportedly strong, notably in the legal and finance sectors.

Philadelphia Staffing firms reported overall "demand for workers has been rising," primarily attributed to an expected expansion in service sector businesses. Conversely, the construction and government sectors have moderated hiring.

Cleveland Despite modest economic activity, staffing firms were reportedly "upbeat in the number of job openings." Firms noted the greatest demand in finance and health care.

Richmond Staffing firms reported a "generally stronger demand for workers since our last report," the beige book said. Among the qualifications sought by employers were skills related to technology, sales, and life sciences.

Atlanta The beige book stated that "hiring trends remained positive" during the latter part of the year. Firms noted rising payrolls in commercial construction and continued demand for skilled workers in the energy sector.

Chicago Although the district experienced modest growth, hiring increased and a district staffing firm cited steady billable hours with strong temp-to-perm conversions and permanent placements.

St. Louis The continued expansion of the services sector raised expectations for increased hiring in the fields of information technology and administrative and support services.

Minneapolis "Labor markets continued to show signs of gradual tightening," the beige book stated. Wage growth was reportedly "modest," with upward pressure observed in some areas.

Kansas City A sustained expansion of employment was reported, with skilled worker shortages noted in the finance, sales, industrial, and energy sectors.

Dallas Staffing firms reported "high demand for professionals with experience and technical skills, especially in the accounting, financial services, and information technology services industries."

San Francisco Tight labor markets, accompanied by wage pressures, were noted in the district's finance and technology sectors. Cost increases due to employee benefits were observed.

On Jan. 10, the U.S. House of Representatives approved a bill to increase the federal minimum wage to $7.25 per hour over the next two years. The Senate is considering a similar bill.

Additionally, it was previously reported (in the Jan. 8 issue of Staffing Week) that Florida had raised its hourly minimum wage to $6.40. The minimum wage in Florida is $6.67 per hour as of Jan. 1.

Since its launch Aug. 1 the ASA Staffing Index has predicted the monthly employment situation report from the U.S. Bureau of Labor Statistics.

The index is a measure of weekly changes in the number of temporary and contract employees working for U.S. staffing companies. Once a month, on the Tuesday before BLS releases its employment situation report (generally the first Friday of the month), ASA releases a summary of the previous several weeks of index results. The report is e-mailed to journalists, economists, and others and is posted on americanstaffing.net.

The November summary, released Dec. 5, reported, "The ASA Staffing Index remained relatively unchanged from October into November. After reaching a new high of 105 for the period Oct. 9–15, the index has modestly fluctuated between 105 and 106 through the period Nov. 13–19. In month-to-month comparable periods including the 12th of each month [the BLS measurement period], the index was flat at 105."

The BLS report released Dec. 8 similarly declared that staffing employment changed little in November. Temporary help services employment increased by about 5,000, seasonally adjusted, which was 0.2% more than in October.

Economists, journalists, policy makers, and others who recognize that the staffing industry is a leading indicator of overall U.S. employment find the index to be a valuable resource; ASA receives many requests to be added to the distribution list. Also, the index Web page of americanstaffing.net is one of the most frequently visited on the site.

Staffing companies use the index to evaluate their performance against a national metric on both a weekly and a long-term basis. Two numbers are reported weekly: the index itself, which shows staffing employment trends over time, and the weekly percentage change in staffing employment. Both numbers are posted on the ASA Web site, generally on Tuesday mornings.

All staffing companies are invited to participate. Participants receive an e-mail every Friday morning that asks how many payroll checks were issued during the previous week and the week prior. On Tuesday morning a report of the week's results is e-mailed directly to participants.

To learn more about the Staffing Index and find out how to participate, visit americanstaffing.net.

America's unemployment rate edged down in September even as overall job growth cooled, according to data released Friday by the U.S. Bureau of Labor Statistics. Meanwhile, BLS said, "Temporary help services employment was little changed over the month and has been relatively flat thus far in 2006."

Seasonally adjusted, BLS preliminarily estimates that staffing industry employment declined slightly from August to September, but remained up 0.7% over the same month last year.

BLS characterized the overall employment situation as "unchanged," even though the unemployment rate dipped to 4.6% (it had been 4.8% in July), suggesting a tighter labor supply. Perhaps the characterization was driven by September's relatively weak job growth; the U.S. economy added only 51,000 payroll jobs last month, about 75,000 less than expected and well off the July and August pace of 123,000 and 188,000, respectively, as revised.

The ASA Staffing Index and the BLS data for September agreed on a nonseasonally adjusted basis. The index issued last Tuesday for Sept. 11–17—which corresponds with the BLS survey period—came in at 102, which indicates that staffing employment in that period was 2% higher than in the comparable period for June, when the ASA Staffing Index was launched. BLS nonseasonally adjusted data for temporary help services for those periods also shows a 2% increase.

With the exception of some modest softening associated with the Labor Day holiday, the ASA Staffing Index has been steadily improving since a midsummer trough pegged to the long Independence Day holiday weekend.

Once again, staffing industry employment held steady in July, according to data released Friday by the U.S. Bureau of Labor Statistics. Last month's job count in temporary help services changed little from previous months this year but was 3.1% more than in July of last year.

Staffing industry employment has moved little since peaking last October–December. Historically, BLS numbers show that industry employment declines modestly early in the calendar year and grows to a high point late in the year. That pattern has been largely absent this year.

BLS figures show that temporary help jobs have been hovering around 2.6 million over the past nine months. In Friday's report, BLS revised the May and June numbers upward to show staffing employment growth in May as well as in March, but otherwise, the job numbers have very slightly edged down from month to month. On balance, though, staffing employment has declined less than 1%.

BLS reported modest overall job growth in July—113,000—and an unemployment rate of 4.8%, up from 4.6% in May and June. That 0.2-point rise is the biggest one-month increase since October 2001. Despite BLS revising the May and June payroll numbers slightly upward, gains in recent months have been well below the 12-month average ending in March, which was 169,000.

Hiring was most prominent in professional and business services, health care, and food services. Manufacturing jobs declined. Hourly earnings increased by seven cents; compared with a year earlier, July wages were up 3.8%.

Staffing industry employment was essentially unchanged again in June, according to data released Friday by the U.S. Bureau of Labor Statistics. While temporary help services employment has been virtually flat since January, it nonetheless continued to show growth over the same period last year—the staffing job count in June was 3.2% higher than in June 2005.

BLS data show that the growth rate of temporary help jobs has been slowly declining, and total employment in the industry has edged down half a percentage point since January. However, anecdotal reports suggest that staffing companies are faring well—specifically, they are seeing continued strength in demand for direct hire and permanent placement services.

Overall nonfarm payroll employment increased by 121,000 jobs last month, according to BLS. That was a boost from May, but less than what most economists had expected—the median estimate of 23 economists polled by Dow Jones Newswires and CNBC had projected an increase of 200,000 jobs.

Meanwhile, the unemployment rate remained unchanged at 4.6% last month, BLS said, which may account in part for the recent tempered growth in staffing industry employment. The industry's job creation dropped markedly in the late 1990s when the U.S. unemployment rate fell below 4.7%.

Notable job growth occurred in health care, accounting services, computer systems design, food services, manufacturing, support activities for oil and gas operations, and local government, BLS said. Retail trade employment, which had been declining recently, changed little in June. Most other sectors remained essentially unchanged.

A New York federal court has held that a temporary nurse could collect overtime payments from the hospital she was assigned to because the hospital was her joint employer.

The nurse was assigned through three different staffing firms and, over the course of approximately one year at the hospital, she worked more than 40 hours in each of approximately 16 weeks. She did not receive overtime pay and, as a result, sued the hospital.

The hospital argued that it was not her employer and thus not liable for overtime. The court disagreed, holding that "economic reality" showed that the hospital exercised functional control over the nurse and thus was her joint employer. The court noted that the nurse worked at the hospital's premises, used its equipment, and rendered services integral to the hospital';s operation; the hospital also effectively scheduled her work hours, regularly evaluated her performance, and could prohibit her from continuing the assignment if her performance was unsatisfactory.

The nurse did not sue any of the staffing firms—presumably because she did not work more than 40 hours in a workweek for any one firm. Because of that, none of the staffing firms could be held liable. The nurse's only recourse was to recover from the hospital as her joint employer.

To read the decision, see Barfield v. New York City Health and Hospitals Corp., 2006 WL 1462269 (S.D.N.Y. 2006).

Staffing industry employment was essentially unchanged in May, according to data released Friday by the U.S. Bureau of Labor Statistics. While nonfarm job growth slowed significantly last month—an increase of 75,000 compared to an average monthly increase of 164,000 from January through April—"Temporary help employment has been flat since January," the BLS report said.

Nonetheless, the staffing job count was 3.7% higher in May than a year ago, continuing to outpace overall employment growth.

The unemployment rate edged down to 4.6% last month, BLS also reported Friday. Low unemployment appears to have been a key constraint to staffing industry growth in the late 1990s. ASA data show that the year-over-year employment growth rate for the staffing industry dropped from double digits in 1997 to the low single digits in 1998 when the U.S. unemployment rate fell into the range of 4.3% to 4.6%. With the labor force participation rate flat at about 66% since April 2005, supply growth depends on population growth, which BLS generally predicts at 1% per year.

Notable job growth in May occurred in health care, computer systems design, wholesale trade, financial activities, and mining (especially as related to supporting oil and gas operations), BLS said. There were notable declines in retail trade and in the motion picture and sound-recording industries. Manufacturing also edged down, offsetting April's increase.

In a sign of easing wage pressure, BLS reported that average hourly earnings for private-sector production and nonsupervisory workers increased by one cent, following a 10-cent increase in April.

The U.S. Department of Labor recently issued an opinion letter clarifying when certain employees qualify for the "outside sales" exemption from minimum wage and overtime requirements under the Fair Labor Standards Act. Although the March 31 opinion letter addresses the exemption's application to mortgage loan officers, it provides helpful guidance to staffing firms in determining whether their sales personnel may qualify for the exemption.

According to U.S. DOL, an employee would qualify for the exemption if the individual's primary duty is making sales away from his or her employer's place of business. "Primary duty" means the employee's principal, main, or most important duty.

DOL noted that outside sales do not include sales made by mail, telephone, or the Internet unless such "contact is used merely as an adjunct to" sales made at the customer's place of business. Activities such as phone calls, sending e-mails, and meeting with clients in the employee's office will not destroy the exemption so long as such activities are incidental to, or are performed in conjunction with, the employee's outside sales activities at the customer's workplace. Such outside sales activity at the customer's worksite must "normally and recurrently" be performed every week.

Thus, staffing firm employees who make most of their customer sales over the telephone would not qualify for the exemption, while those who recurrently make sales calls to the customer's worksite may qualify. To read the opinion letter, visit the DOL Web site.

Good news for technical and information technology staffing firms: Employees in the technology sector are in demand and “back in the driver’s seat,” according to global outplacement consulting firm Challenger, Gray & Christmas Inc. Its recent survey of the tech sector counted 40% fewer jobs cuts in the first quarter of 2006 compared with that of 2005.

Specifically, 39,379 tech jobs, which include computer, telecommunications, electronics, and e-commerce work, were cut during January, February, and March this year, compared with 59,537 in the same period during 2005.

And the sector continues to strengthen. According to the IT employment index from the National Association of Computer Consultant Businesses, the sector added 6,400 IT workers in March alone.

“IT staffing firms [that] provide IT professionals on a ‘just-in-time’ basis report strong demand for their services,” reported NACCB, adding, “because of the flexible nature of IT staffing…IT staffing companies are often the first to see the strength (or weakness) in IT demand across multiple clients and industries.”

Requests for “very specifically skilled and educated workers” are especially high, says Daniel J. Muhlfelder, executive vice president of ASA member L.J. Gonzer Associates. Customers are increasingly “asking for very specific skill sets,” he says.

While news of easing jobs cuts reflects a good economy, Muhlfelder, who serves on the policy council for the ASA technical, IT, and scientific section, cautions that mergers and acquisitions and off-shoring, factors that greatly affected tech job cuts in the past, are still challenges in today’s market.

America’s staffing companies added 15,700 jobs to their payrolls in March, according to data released Friday by the U.S. Bureau of Labor Statistics, employing an average of 2.62 million temporary workers per day for the month.

Staffing industry employment was up 5.1% over year-ago levels and showed a slight acceleration in growth from February, which had year-over-year growth of 4.6%. This increase is in line with anecdotal comments from industry contacts noting increased employment.

While Friday’s report did include moderate downward revisions to previous estimates for January and February, staffing companies still fared fairly well at the close of the first quarter of 2006—posting a nearly 5.2% gain over the same quarter last year.

Nonfarm payroll employment increased by 211,000 in March, above economists’ expectations of about 200,000. “During the 12 months ending in March, monthly employment growth averaged 174,000,” reported BLS commissioner Kathleen P. Utgoff. “Over the month, there were widespread job gains in the service-providing sector.” Increased hiring was noted in professional and business services (which includes temporary help), leisure and hospitality, health care, retail, financial activities, and mining (oil and gas). Manufacturing employment remained flat, with offsetting gains and losses in various industries.

The unemployment rate declined slightly over the month to 4.7% and has remained at or below 5.0% for the past six months. Average hourly earnings for production workers increased by three cents in March, to $16.49, up 3.4% from the same month in 2005.

“Economic activity continued to expand in January and February,” the Federal Reserve Board said in last week’s “beige book” report on current economic conditions. “Employment continued to increase in most locations and in many sectors of the economy,” and “demand for temporary workers was strong in most areas.”

Boston “Demand for workers is strong in office services, call centers, manufacturing, health care, and information technology services,” the beige book reported. “Demand for permanent and temporary-to-permanent hiring continues to grow.”

New York According to the report, “The labor market has shown further signs of strengthening, particularly in New York City’s financial sector, and there are signs of a pickup in hiring in the manufacturing sector.” Strong hiring was also noted in the legal sector.

Philadelphia “Employers in a range of industries reported that labor markets have tightened,” the beige book said, noting increased “difficulty attracting and retaining qualified workers at all skill levels” and an increase in employee turnover.

Cleveland “Hiring continued to appear somewhat sluggish across the district,” the report said, “though contacts from staffing services firms noted that district openings were on the rise.”

Richmond District staffing firms “reported stronger demand for workers,” the book said. “Executive-level assistants, skilled tradesmen, and data-entry clerks were widely sought,” and “several temporary employment firms noted some difficulty in finding qualified workers to fill positions.”

Atlanta “Labor markets were described as firm in most areas,” the beige book said, “and shortages in several sectors were noted,” including construction, hospitality, health care, and truck drivers.

Chicago “Staffing services firms reported that temporary hiring increased steadily again in most areas in the district,” the book reported, “though Detroit continued to experience stagnant demand.”

St. Louis Economic activity in the district has “expanded modestly,” the report said. Improved conditions were noted in manufacturing, and growth was noted in the services sector.

Minneapolis “Labor markets showed signs of tightening in several parts of the district,” the beige book stated. Specialized and skilled workers were in short supply.

Kansas City “Labor markets softened somewhat relative to recent surveys,” the report said, as hiring announcements fell short of layoffs in January and February. Similarly, “growth in manufacturing activity eased.”

Dallas “Temporary staffing agencies say activity picked up and was markedly higher than expected,” the book reported. “Orders were primarily to supply workers for call centers, distribution centers, and light industrial manufacturing.” Accounting and legal services were also in demand.

San Francisco The district’s “solid economic expansion remained on track,” the book said.

While it’s easy to focus on making this year’s numbers, smart staffing companies are preparing now to position themselves for success five and 10 years from now. With globalization, the diffusion of technology, increased automation, changing demographics, and a rapidly evolving economy, major changes are coming to the American work force.

Most important for the staffing industry, the U.S. Bureau of Labor Statistics projects that the employment services sector will create more new jobs by 2014 than any other industry: 1.6 million, more than twice that of any other.

“The catalyst for this industry’s growth will be increases in the demand for temporary staffing services,” BLS says, “as flexible work arrangements and schedules continue to proliferate and businesses make their staffing patterns more responsive to market changes.”

Employment in office and administrative support occupations is expected to grow more slowly than overall employment, in part because of “the greater use that organizations make of temporary workers employed by the employment services industry.”

In the industrial sector, BLS sees growth in construction employment offsetting a decline in manufacturing employment. “One-eighth of the new jobs [in construction]—and the fastest growth—is expected to be in the employment services industry.” While BLS says manufacturing jobs will decline by more than 750,000 jobs, which is one-quarter the rate of the previous decade, it notes, nonetheless, that production “employment is projected to grow by nearly a quarter of a million in the employment services industry, which provides employees to other industries on a contract or fee basis.”

As for other sectors, BLS says, “Nearly 25% of all new jobs will be in the professional, scientific, and technical services sector, which includes management, scientific, and technical consulting; and accounting, tax preparation, bookkeeping, and payroll services.” About 20% of new jobs are expected to be in health care. Other leading growth sectors include education (especially at colleges) and government (mostly local).

Interestingly, BLS noted that “Legislation and court rulings setting standards in occupational safety and health, equal employment opportunity, wages, health care, pensions, and family leave will increase demand for employment, recruitment, and placement specialists.”

For more detail on BLS industry and employment projections, visit americanstaffing.net

America’s staffing companies began 2006 with solid growth. According to data released Friday by the U.S. Bureau of Labor Statistics, temporary help firms added 14,300 jobs to their payrolls in January—a 7.6% increase over the same month last year and the best year-over-year increase for the month of January since 2000, the industry’s peak year. January’s growth also showed modest acceleration in the year-over-year growth rates seen throughout most of the past 12 months.

Staffing employment posted record levels for January, at 2.65 million—the highest number recorded for the month since BLS began tracking the industry.

Over the past year, temporary help services added 187,000 new jobs, accounting for 8.9% of all new jobs created in 2005. Friday’s report from BLS included annual benchmark revisions, with staffing industry employment figures adjusted downward each month last year. After revisions, preliminary figures from BLS now show annual average daily employment for the staffing industry in 2005 at 2.54 million—up 6.3% from 2004.

Nonfarm payroll employment increased by 193,000 in January, below most economists’ predictions of nearly 250,000. BLS commissioner Kathleen P. Utgoff noted that “employment growth occurred in construction, mining, and in several service-providing industries,” including health care, food services and drinking places, computer systems design, management and consulting services, and financial activities.

“The unemployment rate fell to 4.7%,” Utgoff said, a marked drop from 4.9% in December and the lowest level since July 2001 when the rate was 4.6%.

“Economic expansion continued across the 12 Federal Reserve Banks through the last several weeks of 2005,” the Federal Reserve Board said in last week’s “beige book” report on current economic conditions. “Most districts reported moderate increases in employment. Labor markets tightened in some areas and for some occupations.”

Boston “Business activity continues to expand in the first district, although this growth is not generally translating to increases in employment,” the beige book reported.

New York According to the report, “The labor market has shown further signs of strengthening, for both office workers and factory workers.” A major New York City staffing firm reported that “the number of quality jobs far exceed[s] the number of quality candidates,” with most recruiting activity occurring in financial and legal services.

Philadelphia “Employment agencies and temporary help firms indicated that demand for workers has picked up recently,” the beige book said.

Cleveland “Hiring still appeared somewhat limited throughout the district,” the report said, “though staffing services companies reported an increase in client orders, which was attributed to expectations of ongoing economic expansion in 2006.”

Richmond District staffing firms “continued to report generally strong demand for workers,” the book said. “Skilled manufacturing, administrative, and customer service employees were among the most highly sought worker categories across the district.”

Atlanta “Economic activity continued to expand at a solid pace,” the beige book said. “Reports suggest that regional labor markets continued to firm, with the demand for skilled workers in the construction industry particularly strong.”

Chicago “Employment continued to increase in many locales and in a wide range of sectors,” the book reported. “Staffing services firms reported that temporary hiring picked up steadily again in most areas.”

St. Louis Economic activity in the district has “expanded modestly,” the report said. Growth was noted in the services sector.

Minneapolis District employment “increased slightly,” the beige book stated, “with optimistic signs for future hiring noted.”

Kansas City “The 10th district economy expanded moderately,” the report said. Manufacturing activity “expanded solidly” and “factory activity is expected to continue to grow in the months ahead.”

Dallas “The labor market continues to slowly tighten,” the book said. “Workers with specialized skills remain in short supply,” and “temporary service firms say a very high percentage of workers are obtaining full-time positions from initial short-term contracts.”

San Francisco The district’s “economy continued to expand at a solid pace,” the book reported, noting labor shortages in the energy sector.

America’s staffing companies added 5,200 jobs to their payrolls in November, according to data released Friday by the U.S. Bureau of Labor Statistics. Temporary help employment was up 4.8% over the same month last year—an acceleration from October’s year-over-year growth rate of 4.5%.

While this month’s job gain, as reported by BLS, was modest, recent anecdotal comments from industry firms and the “beige book” (released by the Federal Reserve Board last Wednesday) have indicated that hiring for the season has been stronger than in previous years and better than this month’s estimate by BLS might indicate. BLS revisions in coming months may closer approximate industry experience and expectations.

The report for November also included a downward revision to October’s temporary help employment figure, reducing the initial estimate by more than 15,000 jobs and adjusting the year-over-year growth rate for the month from 5.1% to 4.5%.

“Employment rose in November (+215,000), following two months when job growth was held down by the direct and indirect effects of the hurricanes that struck the Gulf Coast,” reported BLS commissioner Kathleen P. Utgoff. Job growth occurred in several industries, including construction, education and health services, food services, and several sectors within the professional and business services industry.

The unemployment rate remained steady at 5.0%. Average hourly earnings increased by three cents to $16.32—up 3.2% over the same month last year.

In a case that illustrates how staffing firms can insulate themselves from liability when confronted with harassment claims, a New York court recently dismissed a temporary employee’s racial harassment lawsuit. The court found that the staffing firm exercised reasonable care to prevent and correct harassing behavior and that the employee failed to take advantage of opportunities provided by the staffing firm to address and remedy workplace harassment.

The employee was assigned to a major telecommunications company, where she allegedly was subjected to a race-based hostile work environment. She claimed that her supervisor made racial epithets in her presence, engaged in unprofessional and abusive behavior toward her, and on one occasion, yelled abusively at a group of fellow employees, almost all of whom were African-American.

The employee complained to her superiors at the customer and to the staffing firm. She never, however, complained that her supervisor used racial epithets in her presence. In response to her complaints, the staffing firm offered to find a new assignment for her, but she declined because the telecommunications company was close to her home. She then filed a hostile work environment charge with the Equal Employment Opportunity Commission and thereafter filed the lawsuit.

The court noted that an employer can escape harassment liability if it exercises reasonable care to prevent and promptly correct harassing behavior and if the person alleged to have been harassed failed to take advantage of preventive or corrective measures provided by the employer.

The court found that the staffing firm had taken reasonable measures to prevent and correct harassing behavior because it had given a harassment and discrimination policy to the employee when she was hired. The policy advised her to contact her staffing firm supervisor if she ever believed she was the victim of discrimination or harassment. The court also found that the employee failed to take advantage of corrective measures provided by the staffing firm. It noted that it was questionable whether she ever told the firm that she was subjected to racial epithets and that even if she did, she rejected the firm’s offer of another assignment. As a result, it dismissed the lawsuit.

To read the case, see Davis v. Verizon Wireless, 2005 WL 2450203 (W.D.N.Y. 2005). To learn more about protecting your staffing firm from harassment claims, consult the ASA training video “Workplace Harassment: How You Can Protect Against It.” For details and to order, visit americanstaffing.net.

Earlier this month, the Senate Judiciary Committee approved a proposal to increase the annual cap on H-1B visas by up to 30,000 for a five-year period. The measure would impose a new $500 fee on those visas in addition to current fees. The H-1B program allows employers to hire highly skilled foreign workers for temporary positions.

The original proposal, which called for an annual increase of 60,000 visas for the next five years, was amended by the committee in an effort to ensure broader support when the package eventually heads to the Senate floor. The final proposal also imposes a new $750 fee for L-1 visas, which are granted to multinational companies to temporarily transfer foreign employees to their U.S. offices.

As expected, the committee’s approval of the H-1B proposal met with cheers from the business community, which has been lobbying for years to convince lawmakers that the current cap of H1-B visas, which is 65,000 per year, is too low. Meanwhile, opponents continue to question the need for an increase in the annual cap.

The committee’s proposal and one in the House of Representatives are designed to meet obligations under a budget agreement to find $60 million in savings for fiscal year 2006. The proposals will be reported to the Budget committees in the House and the Senate, respectively, and the Budget committees will include the proposals in a larger budget reconciliation package this year.

As has been well publicized, the Federal Trade Commission and Federal Communications Commission established a national registry prohibiting telemarketing calls to consumers who have placed their numbers on a do-not-call (DNC) list. ASA has maintained that these rules should not apply to recruiter calls to job candidates when the candidates are not charged a fee. The FCC, in an opinion letter issued to a staffing firm, confirmed ASA’s interpretation of the rules.

“Telephone solicitation” is defined as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.” The Telephone Consumer Protection Act and applicable regulations prohibit all telephone solicitations to “residential subscribers” who have placed their numbers on the DNC list. The FTC’s telemarketing sales rule prohibits “outbound telephone calls,” including calls “initiated by a telemarketer to induce the purchase of goods or services,” to those on the DNC list.

Given these definitions, the FCC has advised that the rules do not apply to calls made by recruiters to job candidates who are not charged a fee. Thus, staffing firms should not be required to “scrub” their calling lists against the DNC registry when calling job candidates, including initial calls to schedule screening interviews and later calls when positions become available. The rules also do not apply to calls staffing firms may make to businesses to enlist new customers.

However, calls to sell career placement services to individuals would be prohibited by the rules. For example, calls to provide counseling services or edit a résumé would not be allowed if the person called would be paying for those services.

The FCC’s position regarding telephone job offers is consistent with court rulings interpreting the do-not-fax rules. In several cases, courts have held that faxes to job candidates do not run afoul of the rules because offering jobs does not constitute the sale of goods or services.

In the context of e-mails, ASA has submitted comments to the FTC regarding the Can-Spam Act, arguing that e-mails to candidates should not be covered by the act when staffing firms are not trying to sell candidates anything. The FTC continues to promulgate rules to implement Can-Spam, and ASA will continue to try to obtain an interpretation favorable to the staffing industry.

America’s staffing companies added a modest 7,000 jobs to their payrolls in August, according to data released Friday by the Bureau of Labor Statistics. Temporary help employment was up 5.3% over the same month last year.

“Job growth in the [staffing] industry has slowed since last fall,” said BLS commissioner Kathleen P. Utgoff, but has continued to grow and still remains significantly higher than in the same period last year. Year-over-year growth has slowed in recent months, from an average rate of 8.5% in the first quarter to 6.2% in the second, and 5.5% so far in the third quarter of this year.

The report for August also included a significant upward revision to July’s temporary help employment figure, adding 7,300 jobs to the initial estimate and actually showing growth for the month rather than the previously reported decline.

“Nonfarm payroll employment rose by 169,000 in August,” Utgoff reported. Job growth occurred in several industries, including health care, accommodations and food services, and construction. Manufacturing employment was down slightly for the month. Upward revisions to nonfarm employment in June and July were also noted.

The unemployment rate declined in August to 4.9%, and has trended downward since February, when it was 5.4%. Average hourly earnings increased by two cents to $16.16, up 2.7% from the same month in 2004.

“Hurricane Katrina struck Florida and the Gulf Coast after the August survey reference period, and therefore did not affect August estimates,” Utgoff commented.

The 1st U.S. Circuit Court of Appeals has upheld the denial of benefit claims brought by staffing firm employees against Verizon Communications.

The employees were hired by Verizon Communications but payrolled through staffing firms from 1994 to 1998. The staffing firms issued the employees’ paychecks, but in all other respects they were treated like regular, full-time Verizon employees. They received the same training, performance reviews, and access to Verizon facilities as other employees; were invited to corporate functions and staff meetings; and were told to identify themselves to outsiders as Verizon employees.

After Verizon terminated their employment, they filed a class-action suit alleging, among other things, that Verizon had violated their rights under the Employee Retirement Income Security Act. The district court dismissed the claims, and the plaintiffs appealed.

On appeal, the court agreed with the district court’s ruling that the employees were not entitled to benefits because the plan expressly excluded persons not “paid directly” by Verizon—and that even if plaintiffs were common-law employees of Verizon by virtue of their integration into the work force, that by itself does not entitle an employee to benefits under Erisa. The plan document controls, not common-law status, the court said.

Two of the plaintiffs’ claims—that Verizon wrongfully interfered with their right to participate in the plan by misclassifying them as temporary employees and failing to reclassify them as regular employees, and that Verizon breached its fiduciary duty by misclassifying them and imposing arbitrary eligibility criteria—were held barred by the statute of limitations. The district court held that Verizon did nothing wrong merely by classifying them as ineligible temporary employees, but because the claim was time-barred, the appeals court found it unnecessary to address whether Verizon’s failure to reclassify them as regular employees at some point violated Erisa.

The court also rejected the employees’ argument that Verizon’s eligibility standards violated Erisa because they did not comply with tax code regulations that deny preferential tax treatment to benefit plans that exclude employees based on unreasonable classifications. Without addressing whether the standards actually violated the tax rules, the court held that since those rules are not part of Erisa they can’t be the basis of an Erisa violation.

Finally, the court rejected the plaintiffs’ argument that Verizon’s payroll lists were not in the plan document itself and therefore Verizon’s “paid directly” rule violated the Erisa requirement that benefit plans must be in writing. The court held that Verizon’s plan documents gave employees adequate notice that participation was based on who was on Verizon’s payroll, and that an employee’s payroll status was readily discernible.

To read the opinion, see Edes v. Verizon Communications et al. (2005 WL 1805123 (1st Cir. Mass. Aug. 2, 2005).

Today’s so-called “contingent” work force is pretty much the same as it was four years ago, despite the upheaval of Sept. 11, 2001, corporate scandals, recession, war, and, finally, economic recovery, the U.S. Bureau of Labor Statistics reported last Wednesday. Despite the sameness, there were a few findings of interest to the staffing industry.

BLS uses a broad definition of contingent workers: persons who do not expect their jobs to last or who report that their jobs are temporary. According to BLS, most contingent workers are independent contractors and on-call workers, but the agency considers most temporary-help and contract-firm workers as contingent.

BLS began a biennial survey of contingent workers in February 1995, which was silently suspended in 2003, thereby missing the effects of the 2001-02 shocks to the U.S. economy. Thanks in part to ASA efforts, BLS resumed the survey this February.

But the 2003 survey gap means comparing this year’s rebound data against February 2001 data, when economic expansion and overall employment peaked—it was the month before the recession officially began. While more people are employed today than in 2001 and the current unemployment rate is low by historical standards, this year’s BLS contingent work force survey of 60,000 households was conducted only months after an extraordinarily long “jobless” recovery.

The BLS survey results show that the proportion of U.S. workers holding contingent jobs was little different in February 2005 than in February 2001, but the effect of the recession is noticeable:

• In 2001, a slight plurality—45%—of “temporary help agency workers” preferred their alternative work arrangements to traditional ones. In 2005, 32% preferred the alternative, comparable to 33% in 1999.
• In 2001, 48% of temporary help agency workers were covered by health insurance, 11% by their employer. In 2005, 40% were covered, 8% by their employer—comparable to the 1999 figures of 41% and 9%, respectively. Over the same six-year period, contract worker coverage continued to be very high at 80%; employer coverage declined slightly to 49%.
• School enrollment among temporary and contract workers dropped precipitously, from 28% for both groups in 2001 to 5% for temporary workers and 13% for contract workers in 2005.

ASA will report on additional findings in future issues of Staffing Week. A summary of the results is available at www.bls.gov from the Economic News Releases page.

America’s staffing companies added a moderate 8,800 jobs to their payrolls in June, according to data released Friday by the U.S. Bureau of Labor Statistics. This 6.1% increase in temporary help employment marks two years of consecutive year-over-year growth for the industry.

However, despite temporary employment increases in June and upward revisions to employment estimates for May (up nearly 8,000 jobs from BLS’s initial report), BLS commissioner Kathleen P. Utgoff commented, “Temporary help services employment was little changed over the month [of June].” She also said, “Job growth in the industry has slowed since last fall.”

While staffing industry employment growth has experienced a slight slowdown in recent months, employment numbers have remained significantly higher than in the same period last year. June’s growth rate showed a modest reacceleration from May (5.7%), although still down from higher rates most months of last year and the 8.5% average monthly rate of growth seen in the first quarter of this year.

“Nonfarm payroll employment rose by 146,000 in June,” Utgoff reported. Job growth was strongest in professional and business services and health care. Employment in architectural and engineering services, and computer systems design continued to trend upward in June, as did construction and financial activities employment. Manufacturing employment, however, declined for the month, largely due to decreases in motor vehicles and parts manufacturing.

“The unemployment rate, at 5%, continued its recent downward trend,” Utgoff said, while average hourly earnings increased by three cents to $16.06, up 2.7% from the same month in 2004.

College seniors ranked temporary employment as the No. 1 work alternative if unable to secure a job in their chosen field, according to a recent survey conducted by ASA member Yahoo HotJobs.

Of the more than 700 graduating seniors polled across the nation, 32% said they would take a “temporary job while continuing to look for a first choice opportunity.”

“Temporary positions allow young workers an opportunity to spend time on a job that may interest them, even if it’s not their ‘chosen’ occupation,” said Marc Karasu, vice president of marketing for Yahoo HotJobs.

“Choosing to accept a temporary position also offers a unique glimpse of the inner industry workings for young graduates,” Karasu added, “and allows them to begin building valuable contacts and their network.”

What other options did seniors pick? Results show that 23% of respondents would consider a full-time position in a different field, 21% would take time off to travel, and 14% would volunteer or intern for free in their preferred field.

The survey also reports that today’s grads favor the fields of communications, finance, and entertainment--31%, 18%, and 14%, respectively. Interest in health care (5.2%) and education (4.3%), however, has dropped over the past year.

Yahoo HotJobs conducts the survey of college seniors annually to identify trends and behaviors in the graduate job market. This year’s survey polled students from colleges in New York, Philadelphia, Chicago, Los Angeles, San Francisco, and Washington, DC.

When the Texas legislature adjourned late last month, the House and Senate had failed to agree on a plan to fund a mandated overhaul of the state educational system. While both sides continue to negotiate, Gov. Rick Perry (R) has said that if an agreement is not reached, he will call the legislators into a special 30-day session.

Legislators were confronted with the task of raising $3 billion for educational funding over the next two years. In March, the House passed legislation revamping the school financing structure, and also passed a revenue bill that would fund the proposed changes. The cornerstone of the bill was a plan to expand the corporate franchise tax to include businesses that are now exempt (e.g., partnerships) instead of requiring all businesses to pay a payroll tax.

During recent negotiations, a “floating floor” was added to the House proposal. Businesses would have two options: They could pay the lesser of 1.75% of taxable wages or $1,500 per employee, or they could pay a franchise tax of 2.5% of earned surplus. Regardless of the option elected, no business would pay less than 0.25% of gross receipts.

The Texas Association of Staffing, an ASA affiliated chapter, has vigorously opposed this proposal, which would severely affect staffing firms in the state.

The funding debate was brought about by a state court ruling that said schools were unconstitutionally underfunded. The state’s appeal of the lower court ruling will be heard by the Texas Supreme Court July 6.

After weathering four arduous years of lowered demand and a 28% loss of jobs, the U.S. staffing industry rebounded to its prerecession employment and sales levels in 2004, ending the year with accelerating double-digit annual growth rates.

The upward trajectory is likely to continue for years to come, with 2005 on pace to be the third consecutive year of double-digit growth. And the U.S. Bureau of Labor Statistics predicts that more jobs will be created in personnel supply services (which includes staffing) than in any other industry in this decade, and that it will be the fifth fastest-growing industry through 2012.

Read about the industry’s comeback, as well as the indicators that suggest continued increases in demand, in the ASA 2005 annual economic analysis of the staffing industry. It’s available in the “staffstats” section of www.staffingtoday.net and is featured as the cover story of the May-June issue of Staffing Success magazine.

Also in the magazine: Read the results of the national poll of businesses conducted for ASA. U.S. staffing companies are giving customers what they want: flexibility and access to talent. But could they do better?

And meet a staffing professional who, at a moment’s notice, pulled off a monumental task: assembling a hospitality crew for one of the biggest events of the year in the nation’s capital.

The latest issue of Staffing Success was mailed to ASA members last week. Back issues are available on the Publications & Products page of the “memberserv” section of www.staffingtoday.net.