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Labor Market

Temp labor: modern slaves, or economic heroes?

Temporary work is booming in Germany. Almost two percent of all employees are temps rented by agencies to other companies to meet peaks in demand without hiring new staff. But conditions are bad in some agencies.

900,000 temp workers are registered with German temporary work agencies. The agencies have the official permission to 'allocate employees,' or rent out their employees to other companies in temporary need of manpower.

The politicians who came up with the idea originally believed that the system would allow the German economy to better react to business fluctuations. At the same time, temporary work would help unemployed people get into permanent jobs. That's how it works in theory, anyway.

Undesirable development

But in practice, several companies recognized the tremendous saving potential that came with hiring cheap temporary workers instead of sticking to their more expensive permanent employees.

Temporary work continues to grow in Germany

Logistics and trade companies in particular tried to reduce the number of permanent staff and switch to temporary workers instead. German drug store chain 'Schlecker,' which has since gone bankrupt, even made permanent staff redundant and tried to re-hire them for wages that were 30 percent lower.

Such practices have since been banned by law. But the biggest problem remains the fact that a large share of all jobs for temporary workers are in areas where no special qualification is needed. Those jobs account for 34 percent of agencies' sales volume. Temporary workers clean up building sites, stock shelves, or put together palettes with goods in warehouses. That's why many are treated with little respect.

Temporary workers report about scandalous conditions

The stories told by some temporary workers on condition of anonymity sound like tales of modern slavery. Some weren’t paid in their trial period, and there was often no contract before they actually started the new job. Some had no fixed hourly rate, while others worked for employers who naturally assumed the workers were willing to work weekends and holidays.

German temp working for a Dutch firm

Rainer, a foreman by trade, has been working for a small temporary work agency for one year. He was hired by a construction firm. It was a tough job and he worked himself to the bone for 14 hours a day – often without proper protection for the work – for an hourly rate of as little as 5 euros (6.5 dollars). He'd been hired under a service contract that liberated his employer from some of the strict legal conditions. "I have very little self-confidence left," says Rainer when asked about his feelings.

In addition, he says, he can hardly feed his family with the jobs he gets. He has to ask Germany's Federal Employment Agency, for a grant every month to get by. Germany spends some 500 million euros a year in such grants that subsidize temporary workers like Rainer who work in the low-wage sector.

Peter works as a temporary warehouseman, and he also has reason to complain. In theory, he would have to be compensated financially for the overtime work that he does. Or those hours would have to result in accumulated credit on his working time account. But the 47-year-old has received neither. "If I claim it they'll fire me," he says, adding that he knows colleagues who were made redundant after they dared speak out in protest.

Trade unions have documented many similar cases. IG Metall, the German metal industry's union, can prove that small temporary work agencies often reduce their costs to a minimum. Temporary workers are often asked to waive certain rights. If a person makes use of the right to stay at home when they're sick, for example, the day often gets taken off their holidays. Or it's an excuse for the company not to pay unrelated additional fees the worker would have been entitled to.

Temporary work can also be an opportunity

Anne Rosner from the Interessensgemeinschaft Zeitarbeit (IGZ), an organization that advocates the interests of temporary work agencies, runs an agency herself and gets angry when she hears about companies that don't play by the rules and contribute to the negative headlines about the industry.

"We're always pushed into the dirty corner, which is not fair because there are more positive examples than negative ones." Rosner says two thirds of all temporary workers are employed in qualified and decent jobs – they work as office clerks, mechanics or engineers, in the areas of financial services, trade or in the car industry.

Temporary worker Roland Seiberlich

Many temporary workers appreciate their agencies for the level of social security they offer. The workers benefit from permanent contracts, which are hardly available any more on the labor market. In addition, a Christmas bonus is included, employment protection and 30 days of paid holiday leave.

"I would have had to stop working after I had a slipped disc," says Roland Seiberlich. "I was given a second chance as a temporary worker," the former car mechanic says enthusiastically, who works as a fork lift driver for his agency.

Office clerk Sascha Eisenhut sees more advantages than disadvantages. "You can try out different firms and find out for yourself what it is that you like doing best." And there is always the chance, he says, that the company that hired you temporarily will give you a permanent contract. The Economic Institute in Cologne (ZIW) confirms that in the last couple of years, some 25 percent of all employees received a permanent job via temporary employment.

Industry pushing for standards

Representatives from temporary work agencies are currently collaborating with two professional associations to improve conditions in the sector. Laws are getting stricter, and there is a code of honor the industry has given itself and all its members. In addition, the Federal Employment Agency has tightened controls of the agencies' work. Equal wages for the permanent staff and the temporary workers of a company are also on the agenda. Those who work in unqualified jobs now get a minimum hourly rate of 8.19 euros.

Ömer Yilmaz runs his own temporary work agency

Ömer Yilmaz has run his own temporary work agency for four years and welcomes the new conditions. He is convinced they will help avoid wage dumping in the sector. "I'm all for the minimum wage. I want to keep my employees."

Yilmaz confirms that the Federal Employment Agency has indeed tightened its controls. "They check every single employee's file." They check whether employees are being paid appropriately and whether they made use of their right to go on paid holiday leave. Yilmaz also had to deposit 2000 euros in a bank account for each of his 100 employees to make sure he can continue to pay their wages should times ever get difficult.

Yilmaz has registered his company with the sector’s professional association, the BAP. His advice to future temporary workers is to check whether the agency of their choice is registered with a professional organization and that the company is not too small.

He acknowledges that there are a number of untrustworthy companies out there – especially in the field of unqualified jobs. Trade unions, he says, are good partners when it comes to helping out in case temporary workers have problems getting paid. In addition, the industry itself has installed a mediator that helps solve disputes between employer and employee.

DW.DE