Staffing Talk » Industry » Obamacare Will Force Me To Shut My Doors

Obamacare Will Force Me To Shut My Doors

Written by StaffingTalk

Obamacare Will Force Me To Shut My Doors

That headline in a business chat room following the Supreme Court ruling caught my attention. Here is the rest of the headline…I Own 8 Staffing Companies and Have Placed over 100,000 people the last few years. Often times the goings on in our nation’s capital do not interest me much, but it was kind of hard to ignore this news. As well as the headline in the chat room. And the ruling certainly does have ramifications for employers of all kinds.

On to the chat room. The original poster says he “cannot offer government-approved health insurance to my temporary employees or afford to pay new federal taxes.” Hence the reason for the potential door shuttering, potentially putting nearly 45 people out of work in the process.

As several people pointed out to this staffing agency owner, however, the government won’t require companies with fewer than 50 employees to offer health insurance starting in 2014. Therefore, companies in this size range won’t have to contend with possible fines like their big brothers. But while firms with 50 or fewer workers would be exempt from coverage provisions, they will still have to contend with rising premiums.

The government won’t require companies with fewer than 50 employees to offer health insurance.

Firms employing 50 or more people, but not offering health insurance, will also pay a shared responsibility requirement if the government has had to subsidize an employee’s health care.

In the course of my research I found several opinions from economist types that contend if you employ less than 25 or are self-employed, you may find that the health care reforms actually bring you tax relief.

We’ll see.

I was curious about what The Washington Post had to say about upholding the core of the Affordable Care Act. The paper’s editorial board said in this editorial this is good news for the court and the country.

Chief Justice John G. Roberts Jr. was statesmanlike in choosing to side with four more liberal justices in finding that the law’s most controversial provision, the mandate that individuals obtain health insurance, was a constitutional exercise of Congress’s power “to lay and collect taxes.” That solution allows the main provisions of the law to take effect. Even more important, it is respectful, as the court should be, of congressional authority and the democratic process that underlies it.

It is respectful, as the court should be, of congressional authority and the democratic process that underlies it.

By the time many of you read this, I will actually be in Washington, D.C. I think it will be interesting to see what the vibe is like there a day after the ruling.

How do you feel about it? Are there are any staffing agency owners among our Staffing Talk readers who feel the same as that online poster? That Obamacare will force you out of business? We’d love to hear your comments and views, either for or against.

  1. Cammy

    The concern they’re raising could be quite valid. Are full time employees those considered just your “in house” recruitment/operations or “all” employees which would include those and all contingent staff – certainly crossing over the 50 employees threshold. At present – I believe – it is a total of “all” and based on number of employees that worked an average of 30 hours weekly in the previous month…also…when did 50 employees become considered a large employer…well…much to learn as it relates to the staffing industry

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    • Anonymous

      FYI:
      50 employees: Companies with more than 50 employees would be required to pay a fee of $2,000 per worker IF the company does NOT provide coverage AND* any of that company’s workers receives federal health care subsidies. The first 30 workers would be subtracted from the payment calculation.

      (source: Highlights of health care compromise bill – CNN.com)

      *Note the conjunction in the condition.

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      • DMMC

        2000 per month or per year? If it’s 2000 per year, that’s way cheaper that standard insurance. I work for a decent sized company. I pay over 300 a month for my very small family to have insurance. My employer pays 1600. So even at 2000 per month, that’s sounds “about right.” at 2000 per year, that’s a deal!

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  2. Scott

    I don’t understand. Are we supposed to feel bad for the man who owns 8 staffing companies? And are we supposed to believe that without him, these skilled people could not find jobs on their own?

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    • gregg dourgarian

      Yes Scott I think we should all be sad when the government keeps people from running legitimate businesses, and yes a lot of skilled people will find themselves out of work or settling for less ideal employment because they will have fewer ways to get connected to jobs.

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      • Michael

        Yeah…I disagree… A man who own 8 staffing company’s can afford to provide coverage to the people that allow him to stay in business…Your manpower is what you need to keep your company running, and as a business owner myself, I have to make sure the people working for me are take care off instead of try to cut corners, because in the end, I only get screwed by not looking out for the people that work for me, and are a direct result of any profit I make.

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        • steve8714

          Only IT or med specialists will be able to maintain a business with less than 50 full-time equivalents. A firm like us which is largely light industrial cannot. I will offer my employers a choice; stop my employees at 329 hours of work each week or pay a surcharge. Given current business conditions, I think they’ll opt for choice number 3; Mexico.

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        • Tyler

          “A man who own 8 staffing company’s can afford to provide coverage to the people that allow him to stay in business…”

          Wow, you’re totally WRONG. Business owners are in business to MAKE MONEY, with as little expense as possible- job creation is a happy side benefit. If I could get by with one person working for me, I would do it. Why should you or anyone else make decisions for me as to what I should, or should not offer my employees.

          How about I tell you, that you should work 50 hours a week, because you have extra time on your hands… because after all, you aren’t doing anything anyway, and if you don’t, you should pay a penalty.

          Give me a break.

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          • Keith

            Excellent point. Our product is our workforce, and as a result we are penalized for every product we produce. Margins are extremely tight to begin with and cannot sustain the Obamacare increase no matter how you look at it. While I’m a big proponent of healthcare being a “right” not a “privilege” why on earth are employers footing the bill. I for one definitely cannot afford to, that’s why I, among many other employers, be laying off and cutting hours to escape the 50 person mandate

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    • Bman

      Sure, as long as you also won’t feel bad for the 1000′s of temp workers that find themselves unemployed when he closes up shop, thanks to the new regulations.

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    • Anonymous

      You obviously haven’t had the pleasure of working with a staffing agency. We place people in positions that are not recruited for out in the public.

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      • Cindy Ingram

        Yup that’s the main reason they need to be shut down. I hope you guys end up on the other side of this thing – see how it feels. ONE HALF of my pay went to the agency. I was TRAPPED in an INDEFINITE temp position (on more than one occasion) – NO INSURANCE – NO TIME TO LOOK FOR OTHER WORK – and the corp using the agency could have paid ME what they paid the temp agency and I could have bought my OWN INSURANCE. AND, I saw people FIRED for nothing – other than to save the agency from paying UI that is.

        Just speaking as one who has had the pleasure of working with you guys.

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        • steve8714

          It’s quite illegal at least here and most everywhere for the agency to take any of your pay.
          We hire people, tell them what they’ll be paid, match social security and medicare, pay FUTA and SUTA and vacations and holidays, pay Workmens’ comp and give our customers open account. If we shut our doors, you think they’ll hire the likes of you? They’ll move to Mexico to avoid doing that.

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          • Cindy Ingram

            You can put sugar on it and call it what you like – I made $17.00 an hour while the agency was PAID $34.00 for each hour I worked. My point was that had the company paid ME $34.00, I could have independently covered all the agency paid. The agency is just a corporate tool. It’s not the democrats, it’s not the republicans – it’s the corporations that run everything. The “corporate state”. So, I’m not convinced that closing your doors adds any real threat to me that isn’t already there – so don’t worry about it :).

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          • steve8714

            If they paid double for you, either work comp must be horrible in your trade, or people are hard to find in your area.
            Thirty-four dollars an hour is what a degreed HVAC engineer with a stamp makes. Would you also pay your own professional liability insurance?
            Also, how would you find that individual work comp policy, and how long would you wait to be paid? I have customers who pay me in 30-45 days while I must make payroll weekly.
            In addition, remember i am not part of a corporation. I am an individual owner as are most staffing service owners, trying to make our own way and build something for my family. The “evil corporations” control a lot less than does the evil Government.
            Average markups even in skill positions are 40-45%. Please tell me in which city you live so I can open there; I can make a living under 50 employees in your town.

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          • gregg dourgarian

            Steve this is an excellent point and congrats on running a successful and profitable agency which is the avenue through which many Americans find their way to full time, prosperous employment.

            Cindy, you seem a lot more intelligent than your political perspective would indicate. Why don’t you go down to your state’s filing office and form your own corporation and bill your own time out at $34/hr? Then you could fix this huge market disequilibrium yourself by hiring all the other people similarly underpaid?

            The people who are providing that market disrupting opportunity are in fact staffing company owners who’ve sacrificed everything to create businesses.

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        • Lisa

          Cindy:

          It seems that you are a bit misinformed about how the staffing industry works. Staffing services do not take anything from your pay except that which is legally required such as taxes or court ordered support payments. The only other deductions would be agreed upon for your portion of any benefits, if that would apply.

          Your pay is your agreed upon hourly pay rate multiplied by the number of hours worked or your agreed upon salary amount. If you didn’t like the amount you were being paid per hour, why did you accept the assignment? You say that you were “trapped” in and “indefinite” temp position. How is this possible? Did someone force you to accept the job and then hold you captive against your will? The thing is, it was your choice to accept the assignment- no one else’s.

          You say that you saw people fired for no reason and you make the assumption that it was so that the agency would not have to pay UI insurance. It seems strange to me that you would be privy to the reasons behind why other workers were let go and it’s nothing but an assumption that the agency did it to get around paying UI. I know in my state, if you fire someone, you are stilll liable for paying the unemployment for that employee unless you can show some sort of misconduct and that is very difficult to prove. If you could prove that, it would certainly fly in the face of them being fired “for no reason.”

          You say that you have NO TIME TO LOOK FOR OTHER WORK. I’m quite certain that it’s not your current employer’s responsibility to make sure you have time available to look for a different job. This applies whether the job is a full time direct hire position or a temporary assignment.

          The corporation using the agency could pay you what they paid the temp agency however, you would then be an independent contractor to that corporation. You would then be paying 15.3% of your earnings to the social security administration as someone self employed instead of the 7.65% you pay as an employee. You would not be covered for workers compensation so, if you were hurt on the job, it would come out of your pocket for medical and any lost time.

          Since you would be self employed, you would not be covered for unemployment and, should the corporation you are working for no longer need your services, you would need to make sure that you have been saving a certain amount of your paycheck every week so you have some income to tide you over until you can find a job.

          You see, all of the above are expenses that go along with employment and those things are paid by your awful, oppressive temporary agency, on your behalf. Those things, along with a small profit are what is covered in the difference between the amount you are paid and the amount the corporation pays to the staffing agency.

          Maybe it’s best that you hang out your shingle as an independent contractor and go it alone. It’s obvious the staffing agency you work for is doing nothing for you and you could do it so much more effectively and profitably on your own.

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  3. Alicia Wellington

    It is my understanding that all temporary workers that are employed more than 30 hours a month will have to be offerred benefits. So it truly isn’t the 45 internal employees that probably already are offerred some form of benefits that is the concern it is the temporary employees that work for the company that causes the issue for most owners. WSi’s w-2′s over a 1000 Healthcare workers a year and a very small % work more than 500 hours for the year for us – being required to offer them benefits will most likely be more effort and costly than it is worth for us.

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    • DMMC

      I am a corporate recruiter. Every staffing service I work with offers their temp employees the opportunity to purchase coverage. I doubt much will change in that arena.

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      • IntheMajors

        @DMCC but does the coverage they offer meet the requirements of Obamacare is the question… Most insurance options offered by staffing companies don’t. This means a major increase in our costs which will translate to higher rates paid by you, our client. This has an effect that will be felt across the board for all employers.

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      • cing

        The laughable and basically scammish “insurance” offerings by temp agencies in Georgia should be illegal. They are just additional ways of screwing the worker who is already providing 50% of the salary they earn to the agency. I don’t know how they sleep at night. I hope they all go out of business. If their going out of business makes it harder to find work then maybe it’s time to pack up and move to another country.

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        • not cing

          Cing…if those businesses have it so good and you don’t, why not open a service yourself and give out all those generous benefits?

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      • steve8714

        The corporate world is so different than the world of the industrial temp; these folks typically have shorter assignments and longer layoffs than the people “corporate recruiters” soil their hands with. We offered Essential STAFFCARE, but our employees could not reconcile their workweeks and coverage weeks; off a week, not covered the following week, which made the policy useless to us.
        In addition, although we offered the policy to everyone, only 10% actually took it, preferring Medicaid.

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        • steve8714

          We offered a policy with weekly premiums and weekly eligibility. Our people had the habit of taking their kids to doctors the week they worked; assignments have not been steady the last three years, so being off one week on one week they got confused as to which weeks they were covered. This grew so bad that I quit offering it. Why have them waste premium money?

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  4. gregg dourgarian

    Unless repealed before 2014, the Tempworks entity that provides workercomp/funding/software will incur significant costs to either 1) provide for government-approved healthcare for any employee working > 30 hours or 2) fines of $2-3k/employee/year.

    Kevin Prow, the executive who runs the business, has suggested that given the costs of health care in comparison to costs of fines, it will likely be less-harmful to us to just take the government fines. Even with providing insurance, due to the low wages of employees compared to the high cost of coverage, many employees will still get us in fine situations due to accepting gov’t coverage.

    There is still plenty of time for it to be repealed though and I will keep my fingers crossed.

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    • Evelyn Gibson

      Greg – now that Obama has been re-elected, and Health Care seems to be in the works, what measures have you taken to prepare to cover this extra expense. Clients will have to carry the burden but, how will you approach them? We are looking at several methods, I am interested in a new conversation among Staffing Companies on this! Can you get this going?

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      • gregg dourgarian

        Hi Evelyn. We will be doing our first regularly scheduled legal analysis of the healthcare law and its impact on staffing in January. We’ll be posting notices of it here on Staffing Talk.

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  5. Drew

    It’s not like the kind of employers, similar to the one quoted here, were in any better shape anyway. In fact, at the rate that healthcare costs for employers (and employees alike) were growing, everyone would have had to close shop in the very near future. I don’t believe that Obamacare is the holy grail of healthcare, but it is a stop gap measure all the same, an attempt to plug what was bleeding. You have to start somewhere, then improve of the dang thing… bickering about it like our politicians will get us nowhere. Heck, if the inventors of locomotives had had the brains of our politicians, we would still be riding on carriages.

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    • 19th Century Cindy Ingram on Railroads

      I rode on one of those locomotive trains. They spewed ugly black smoke and made me share my compartment with other people.

      Railroad transportation is a right, not a convenience, and Grover Cleveland should shut them down. Free transportation for everyone!

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  6. Anonymous

    What’s next? Taxes for not purchasing a windmill for your yard? Taxes for not buying your car from a government owned car manufacturer? Taxes for not putting your money in a government owned bank? This isn’t too far fetched.

    The possibilities are endless!!!

    Through taxation of inactivity (failure to purchase a government specified product or service) the government can force people to do anything including many things against your wll.

    This is a sad day for economic freedom and freedom of choice.

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      • Anonymous

        Unlikely? Are you kidding?
        Do you really think this will be the ONLY behavior controlled through government or “tax” fiat? This is unprecented territory – taxing a citizen for failure to purchase a product or service. Now that it’s been deemed constitutional what makes you think the government will stop at but just one behavior to control in the name of security, safety, or the general welfare?

        The bottom line is however unlikely one thinks it is, we lost a part of our freedom.

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  7. david schek

    Dear fellow staffing professionals

    As a resident of Bethesda Md, which is 1 mile outside DC, and a 23 year staffing vet, I am deeply saddened by the passage of this law. I believe it is an assault and an affront to the staffing industry. An industry that efficiently moves human resources/capital between competing firms in the market place; and thereby keeps the gears in our economy lubricated like a well oiled machine. To be sure, I would love for 100% of American to have health insurance, but this law (which I view as a misguided experiment) is not the way to do it (my humble opinion.) The heavy lifting of “bending the cost curve” was not really adressed in this law as I undestand it.

    All the best

    David Schek
    http://www.leaststaff.com
    workers compensation solutions for staffing companies

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    • Kathy

      I work with the unemployed in NJ. Most come from the financial sector and are between 45- 55 years of age. Those that secured employment have done so on the much hated “temp to hire” basis. More than 1/2 are still “temp to perm”, some 14-16 months after hire. So while the Insurance Comanies and the Private Sector have taken advantage of these workers by keeping them “temp”, w/o benefits, they essentially paved the way for OBAMACARE. Try finding insurance you can afford when you are 55+ , and have at least one pre- existing condition( which most people in that age group has) Why didn’t these industries spearhead a drive for affordable health care? Whatever you think of Obama, he at least gave a hoot about these workers. I have great employer/ employee funded benefits. And, I want everyone who works to have access to similar benefits. That is the America my Dad fought for in WWII and worked 2 jobs to provide to his wife and three kids.

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      • Ellen

        Thank you Kathy for your post. I graduated a few years ago and I was a temp employee right after for a couple of years working at the same company –placed through a multinational temp agency. This company favored this agency for all their temp needs, in fact it made a culture of hiring temp creatives most of whom have been there for years. The agency was favored because their big marketing angle is that not only are their prices the best but they provide comprehensive benefits to their temps… But what were those benefits exactly. Paid holiday that you would never get unless you met a quota requirement that you could only achieve by working through federal holidays. 401k with no matching and health insurance that paid for 10k in hospital expenses. For the temp the pay was never competitive, nore did it increase with cost of living and worst of all, since a temp is classified as an employee, the tax advantages of being forced to provide your own benefits [including 600$/months of mid-level health insurance --which is considered cheap in my area btw] were not there either. I know that my situation was a combination of the company not wanting to pay adequately for the positions, of a culture of increasingly relying on permanent temps and the agency giving benefits that only sounded impressive, but nonetheless, it was a exploitative experience– a sentiment shared by other temps btw. And while I am thankful the agency was there in a time I needed them I am glad I moved on from this situation. And I was happy to learn from colleagues that due to Obamacare the agency’s health insurance has been improved and now allows for the bare minimum of preventive visits not just emergency situations.

        Finally, we are already paying a collective tax on people who don’t have any or enough health insurance. The deficits in hospitals from unpaid medical services are compensated for from state and federal dollars… aka taxpayer dollars. And healthcare is something we will all need at one point or another.

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        • too hot to give to the feds

          Ellen, yes there are problems with the current system, but giving yet more control to the government will make things worse.

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      • Cindy Ingram

        May I quote you? Your statement is how every American SHOULD look at this in my humble opinion. Thank you so much for taking the time to post it. I am SO tired of people assuming anybody who thinks like you is a spoiled, unpatriotic American. I work my butt off – always have – worked full time while going to college at night and paid for it myself – will work as long as I can – and run circles around the younger people I’m around (just because of the old work ethic – I’m not “dissing” them – just raised differently). If there is any unpatriotic behavior in this mix – my finger points towards the few at the top who can’t seem to get enough for themselves. We here in the lower middle class KNOW how to look out for our neighbors/our country. If I have enough for my family, you are welcome to it as long as you are trying and you are willing to help when YOU have an abundance. And, I guess that’s how we’ll make it through this time period of egregious greed.

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        • gregg dourgarian

          Cindy, most staffing business owners I know came from lower or middle class backgrounds. The priviliged classes have no idea how to operate in a competitive landscape like staffing.

          I’ll say it again. You seem very smart. Why don’t you start your own staffing business corporation to correct all the market disequilibrium you are seeing out there?

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      • steve8714

        Your dad fought for equal access to benefits? Who knew that’s what millions died for? Seriously, America is built on some doing better than others, having more access(cash) to benefits(stuff) than others. We are built on excellence, not equity.
        In the past, this was predicated on a lot of things, like hard work, salesmanship, risk, but now it is just based on political connection and an Ivy League education. Benefits are what the masters use to keep the slaves quiet.

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  8. Mad as Hell

    For those who are happy about the healthcare law, consider the deeper meaning and interpretation of the Supreme Court’s ruling. The end in this case simply does not justify the mean. Congress had many other options, it did not require an individual requirement to purchase insurance from a private company. Put the shoe on the other foot… READ BELOW.

    Say terrorism, or just simple violence and rioting, becomes widespread to the streets of daily lives of America. The government through an act of Congress can pass a law in the interest of security, safety, and the general welfare of the people that all citizens of the US be required to purchase a gun to protect themselves. Don’t like it? Of course you can choose not to comply…. BUT you MUST pay the tax. And, this tax can be so burdensome that complying is the only way.

    We found out yesterday that our constitution does not protect you from laws like the above.

    Sad day in America.

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  9. Anonymous

    Anyone have a read on what 50 employees means. We have an internal staff of 5 and 20 to 30 staffing consultants (w2) out at any one time These turnover during the course of the year At year end we probably end up doing 70-80 w2s So fte is less than 50, employees at any one time is less than 50, but year end says we had 70-80 employees.
    Also assuming entities sharing common ownership hav a single 50 person limit. This would stop staffing firms from creating multiple entities to stay under 50

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  10. KimmY

    Unfortunately I have NO sympathy for this man that owns 8 Staffing agencies… Sorry!

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    • Steve Cary

      It amuses and baffles me to hear people like you KimmY.

      It amuses me, because I suspect you are the same kind of person that posts how hard it is to find jobs, that companies are not hiring because they’re greedy, yada, yada, yada. And yet a company who is hiring; thousands of people in fact, states that they may not be able to offer those thousands of people the same opportunities in the future and you can’t make the connection:

      Those people he will not be able to hire, may include you!

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      • gregg dourgarian

        This is a good point Steve because it is always the poor get shafted the worst.

        When the Bolsheviks killed off the merchant class and private farms, millions died of starvation. When I lived in the Soviet Union in the late 1970s, the poverty made North Minneapolis look like a country club.

        The only winners in this are those with powerful positions in government.

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    • Lynda G

      A couple of thoughts which occur to me on this touchy subject .

      1. I have always worked for private businesses or public corporations and feel fortunate they exist to provide me with a job to pay my bills. Without business owners and entrpreneurs, there are no jobs. Govt. does not make money of their own – they only spend money they get from us who have jobs. So let’s feel sorry that some of these businesses may disappear because jobs will disappear with them. Profit is not bad – if business owners don’t make money, why should they take the risks involved in having and running the business.

      2. I believe that medicaid, medicare, and social security are broken like we think healthcare is broken. Why should we think govt. at any level will make our healthcare system better. They keep giving everything away in those plans they run now so that they are broken and will not be able to sustain themselves for those who are truly entitled to them. Yes healthcare has it’s share of problems but those could be fixed without complete overhaul on the level that this plan goes to and without giving over control of it (and more of our lives and choices) to big govt.

      3. Price of everything is going to go up along with inevitable tax increases to pay for the administration of it. So whatever is saved in medical insurance payment or premium will be spent on goods, services, and taxes.

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      • Anonymous

        If the issue is as simple as just fixing it, why the heck didn’t congress do that before Obamacare?
        It’s only when one side was actually bold enough to do something that the other side could not do (or didn’t care to do), that all over sudden the outcry could make you think that it was the end of the world.

        Like it’s been pointed out, congress should get their act together and fix the damn problem. Not howl stuff across at each other and chant away. Businesses should be protected, and therefore, they should repeal the portions that are obviously the issue, and compromise on borderline items!

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      • Cindy Ingram

        Corporations are broken. For one example – Look at the salaries of these CEOs. Do you not find it absurd that a failed and FIRED CEO can be HIRED by another company for 15 million dollars? Maybe it’s time to turn the reigns over to a younger generation or at least others who are interested IN THE WORK AND ACCOMPLISHMENT ITSELF and not the money they’ll never spend in their lifetime. This is way out of control.

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        • gregg dourgarian

          Congrats Cindy, this comment about corporations being broken is as close to a rational thought that you’ve come up with.

          Yes they are largely broken. Their primary operating motivation is to keep the current people at the top. They are so broken that they create opportunities for disruption everywhere you turn which is why JCPenney is almost bankrupt and Amazon is worth $100b. Many staffing company corporations are similarly broken.

          So let me ask you once again (3rd time), if staffing corporations are doing such a bad job and yet are making outrageous profits, why don’t you start one yourself?

          In case you are thinking of such an endeavor, here are some reasons not to start one. When all your friends are out having a great time, you will be working your ass off. If you get sick, there is no PTO. If your customers don’t pay their bills, well that’s too bad. Years will go by and your loved ones will wonder whether it is that business or them that you really love.

          And, and, when you finally feel good about yourself because you succeeded in placing that unemployed yet hard-to-find candidate at that $34 an hour job, instead of a thank you, you get a whiny, nonsensical, Marxist rant.

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          • CINDY INGRAM

            It is unfortunate that my complaining about being stuck for over two years consecutively in two “temp to hire positions”, income cut by 1/2, no benefits, no two hour opportunity on any day to interview for permanent work – and no way to refinance my home – the notes for which I can’t make now that my salary is cut in half – came off to you as a “Marxist rant”. Thank you Fox News. ( . . . and Goldman Sachs)

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          • gregg dourgarian

            Cindy…you didn’t just complain. You suggested the government shut down staffing businesses. This is what the Marxist Bolsheviks began doing with busniesses in 1918 and oh yes killing the owners as well.

            Much like you, many staffing business owners including myself worked in a staffing company and also suffered indignities. I unpacked crates of toxic chemicals from Love Canall for $7/hr with no training on safety.

            It only takes one person to change the world for the better.

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        • steve8714

          Cindy, my first experience with temp staffing was on the other end. I worked weekends beating cattle feed out of railcars with a long-handled sledge.
          I’m sure we weren’t paid $17 but what I did make I thought good for the time and I needed the money, so I did it.
          So, when temps tell me the work is too hard or the pay not enough I just nod in agreement and replace them.
          If you think your job is worth twice what you’re paid, quit.

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        • shane

          Cindy,

          As has been pointed out to you several times, if you think there are bloated margins in staffing agencies, open your own firm. Offer full benefits to all of your employees and take what you think is a fair profit giving back to the underprivlidged employees you have working for you.

          I own a small staffing agency. We book about 12,000 hours per week. I make a fair living, but it comes with many hours of work and tons of stress. The margins are very slight in this business and the work comp rates continue to rise, especially when you have a family full of people, that know how to work the system with sore shoulders, backs etc.

          As a matter of fact, you can buy my agency from me and then you can treat my employees way better than I do, and I wont have to worry anymore about Obomacare!

          Shane

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  11. bob

    Let’s stop blaming Obama Care, an overhaul of how we look at health care is long overdue. Blame a disfunctional Congress that spent more time taken care of itself than the American people. The solution is clear, get the Employer out of the health care business, and let the individual consumer make its own choices. Congress is trying to hard to protect the status quo of a health care “market” that by definition rations health care.

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  12. don

    I beleive that the author of the above article, David Gee, does not fully understand the staffing industry. Although the Staffing Agency has 40+ staff employees, every temporary employee of its 8 offices are also employees of the staffing agency. When he claimed that he could not afford coverage for his employees, he was probably referring to coverage (40% of the premium) for the thousands of temporaries he may employ in a years period of time. Not only is it going to be expensive, it is going to be a logistic / bookkeeping nightmare. Also, don’t forget, these costs are obvioulsy going to have to be passed on to the end user….is any of this a good thing?

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    • Anonymous

      If all the costs are passed on to the end user, then won’t most big agencies be able to still compete on an equal footing? Higher cost may mean fewer temps and more reg-hires, but otherwise aren’t we talking about a competively neutral phenomenon?

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      • Steve Cary

        On the surface, it may seem that way, however it becomes an issue of scale. The large National chains may be able to absorb those costs and the reduction in profit for long enough that the market adjusts to the ‘new pricing’. Smaller companies; and that includes the owner with 8 offices above likely will not.

        The initial reaction from client companies will be one comparable to a hiring freeze until they figure out what a new hire actually costs. Then they will shop the staffing companies to compare. The Nationals, buying in bulk, will be better suited to defray the costs of the bill. The smaller companies will see sales shrink, and if they are lucky, after a couple of years, the ‘new pricing’ will not be so shocking and they may be able to start selling on quality again, rather than price.

        It’s just a matter of if their pockets are deep enough to withstand those early years.

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        • doug

          no staffing company will have deep enough pockets to withstand any years!!! My friend has an agency that issues approximately 1,000 w2′s the past several years…. the majority of these employees work(ed) between 40 – 500 hours in any given year. The wages for the positions they fill are between $8-$12 hour, for figuring lets use an average of $10 and 500 hours and a billing mark up to the customer of 40% (which is a liittle high).
          over the $500 hours the employee made $5,000
          the company billed the client: $7,000
          the company pid prox 15% for payroll taxes, unemployment and workers comp = $600
          profit for the company is prox. $1.400 less expensese (that’s about $112 profit / wk)
          List of expenses:
          costs to run payroll
          costs of checks
          payroll department
          sales person
          recruiter
          administrator
          office lease
          phone bills
          electirc bill
          etc etc etc
          these are all UNAVOIDABLE costs of running any business.
          Anyways, how can a small, medium or large agency ever absorb the costs of healthcare for this part time employee and / or the $2,200 penalty for not providing benefits???
          O WAIT, someone had the bright idea of passing on the costs to the client….REALLY, $2,200 / 500 hours worked = $4.40 per hour penalty. that is a 44% penalty and that is if the person actually works the full 500 hours. what do we do with the person that quits after his first week because the position is not just right for him the agency has to find another employee to cover the 460 hours required to complete the job and maybe that person had a family emergency and worked 2 weeksand now another person comes into the position…..YES this happens ALLL the time. Is the employer/agency supposed to provide benefits for these people??? who is going to foot the bill for that?? NOT TO mention both of these people will probably qualify for unemployment and you can’t fight it!!!
          NOW with all those costs passed on to the client $!0/hour now becomes, $14.40 then $18.80 …. who do they pass on the costs of making a product?? the consumer …. c’mon people get real …. we want cheaper product not more expensive product that is why WALMART has gone to China!!!
          healthcare reform needs to happen to some degree but do not force this on the empolyer….I guarantee this will become a MESS and inflate.
          By the way i employ approx. 75 people and i will be forced to LAY OFF personal and do the same with less workers, eliminate profit sharing, bonuses and put a hold on ALL pay increases and will probably result in some people quitting.
          By the way, it’s my company and I built it from scratch and rolled the dice many times, some good some bad, if i make money i pay my taxes, contribute to charity and pay out bonuses BUT if i have a bad year or years because of the policiies in washington nobody will be here to bail me out!!!

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          • steve8714

            We all have missed this; this bill was never intended to cover all Americans, rather to make large unionized companies more competitive with union-free ones. Elimination of staffing companies is not an unintended by-product of the law, rather we were targeted from the start.

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  13. Bonnie OBrien

    Insurance costs are extremely high to begin with, particularly with the double digit increases each year. I don’t think Obamacare is going to make anything better. For those of us small businesses with less than fifty employees the escalating costs, particularly in an economy with decreased business does not make me optimistic that my employees will be happy since they will bear the brunt of paying more towards their coverage OR paying a tax if they decide to forego participating in our plan.

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  14. Anonymous

    I fully support the Affordable Care Act (or Obamacare) as others refer to it. I’ve been working in corporate and agency staffing for nearly 15 years. I was laid off from my previous job in 2010 and would have had to pay $600 plus per month under COBRA to maintain the same coverage. My current employer – a staffing agency – does not provide health care. The good news is that I am a veteran and am covered under VA. Now if I wasn’t a vet, then I would really be in a predicament. Every major industrialized country including all of Europe, the UK, Canada, Australia, New Zealand, and Japan have universal health care. There is no excuse, no excuse whatsoever for this country not to be able to provide health care for its citizens. To say that we cannot afford it or even try it is a defeatist mentality.
    I am tired of business owners of saying that we will shut our doors.

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    • Jeff

      I am ok with that as long as you pay your fair share. I will pay for my insurance and you pay for yours. Don’t tax me to pay for yours too. About $4.50 an hour thats the cost that staffing companies will have to pass along to their costomers.

      Too bad O B one has never spent a day in his life working for a real business.

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    • Steve Cary

      Anonymous, That $600 per month still needs to be paid with universal heath care. If it’s not coming out of your pocket, where do you think it comes from?

      If you find a source for this ‘Magic Money’ I’m sure some of those countries you mentioned, including Greece, would love to hear about it as many are having a hard time funding those services.

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    • Kevin Prow

      Anonymous, like you, I am a vet. I have a service-connected rating with the VA and receive all my care there (less dental and chiropractic, which they do not provide). I will be among those penalized by an excise tax–not for any transaction that would be taxable, but rather for the lack of a transaction. I receive the care I need, but the VA is *not* insurance and will not qualify under Obamacare, so my inaction on purchasing health insurance which I do not need will cost me a fine to the IRS every year.

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      • doug

        no staffing company will have deep enough pockets to withstand any years!!! My friend has an agency that issues approximately 1,000 w2′s the past several years…. the majority of these employees work(ed) between 40 – 500 hours in any given year. The wages for the positions they fill are between $8-$12 hour, for figuring lets use an average of $10 and 500 hours and a billing mark up to the customer of 40% (which is a liittle high).
        over the $500 hours the employee made $5,000
        the company billed the client: $7,000
        the company pid prox 15% for payroll taxes, unemployment and workers comp = $600
        profit for the company is prox. $1.400 less expensese (that’s about $112 profit / wk)
        List of expenses:
        costs to run payroll
        costs of checks
        payroll department
        sales person
        recruiter
        administrator
        office lease
        phone bills
        electirc bill
        etc etc etc
        these are all UNAVOIDABLE costs of running any business.
        Anyways, how can a small, medium or large agency ever absorb the costs of healthcare for this part time employee and / or the $2,200 penalty for not providing benefits???
        O WAIT, someone had the bright idea of passing on the costs to the client….REALLY, $2,200 / 500 hours worked = $4.40 per hour penalty. that is a 44% penalty and that is if the person actually works the full 500 hours. what do we do with the person that quits after his first week because the position is not just right for him the agency has to find another employee to cover the 460 hours required to complete the job and maybe that person had a family emergency and worked 2 weeksand now another person comes into the position…..YES this happens ALLL the time. Is the employer/agency supposed to provide benefits for these people??? who is going to foot the bill for that?? NOT TO mention both of these people will probably qualify for unemployment and you can’t fight it!!!
        NOW with all those costs passed on to the client $!0/hour now becomes, $14.40 then $18.80 …. who do they pass on the costs of making a product?? the consumer …. c’mon people get real …. we want cheaper product not more expensive product that is why WALMART has gone to China!!!
        healthcare reform needs to happen to some degree but do not force this on the empolyer….I guarantee this will become a MESS and inflate.
        By the way i employ approx. 75 people and i will be forced to LAY OFF personal and do the same with less workers, eliminate profit sharing, bonuses and put a hold on ALL pay increases and will probably result in some people quitting.
        By the way, it’s my company and I built it from scratch and rolled the dice many times, some good some bad, if i make money i pay my taxes, contribute to charity and pay out bonuses BUT if i have a bad year or years because of the policiies in washington nobody will be here to bail me out!!!

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  15. Bill

    Scott and Kimmy don’t feel bad for the staffing firm owner of 8 locations because they have no idea the time, effort and money it takes to do this. If they do own a staffing firm, they probably have less than 50 temporary workers and its not an issue for them.

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  16. david schek

    Dear Staffing Executives

    Below is a link to an excellent article about how ACA may result in unintended cost shifting between Work Comp fees/rates and healthcare rates. Clients may find that as with many gov’t programs, after the dust settles, the real costs of the program will emerge in a way where winners and losers can be better identified. I think it is somewhat premature at this point to know who they will be. Also there is MUCH legislation/gov’t. rules that still need to be written about how this plan will be implemented.

    http://www.hrhero.com/hl/articles/2010/04/22/health-care-reform-and-workers-compensation/

    I look forward to sharing additional ideas and thoughts about this important topic.

    All the best
    David Schek

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  17. Mark Turpin

    In the end the most hurt by Obamacare will be the semi-skilled or unskilled worker. Along the way business owners will also take some heat. The nature of economics says that companies will hire fewer people because the cost will be greater. Don’t believe this administration when it tells you that they are looking out for you.

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  18. Steve Risner

    First: I voted for Obama, but whether I will a 2nd time is yet to be seen. Obamacare did nothing to address the real problem, the Health Insurance Industry, Hospitals, and Doctor fees.
    On a personal level, my family Insurance coverage for a $5K Deductable/$10K per policy is now $600/month. The plan includes $25 copay/ DR. Visit & a Rx Card. How on earth does the federal govt. expect employers to pay these fees for their workforce? The answer, they won’t. Wages will continue to slide or remain stagnate if an employer wants to keep up productivity. This mandated benefit will slow the hiring process and risk another recession.
    Premiums will likely rise because small business is forbidden from offering deductable greater than $2K/Individual or 4K/Family. Check out this link: http://101.communitycatalyst.org/aca_provisions/coverage_tiers
    The only saving grace I was able to find was that “New Hires” have a 90 day waiting period, although their upcoming Health Plan has to be discussed and ready to implement. You can read more here: http://www.rjfagencies.com/About/KnowledgeandNews/EmployeeBenefitsKnowledgeandNews/Affordable%20Care%20Act%20Technical%20Release.aspx
    Our company serves a few Western Ohio Auto Industry Suppliers and we are continually looking for cost saving ideas …

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  19. GREGORY MOLLERE

    OBAMACARE WILL FORCE ALL SMALL STAFFING COMPANIES OUT FO BUSINESS.
    HOW ARE WE GOING TO PASS THIS ON TO OUR CUSTOMERS. IF WE COULD DO IT NOW WE WOULD BE PROVIDING INSURANCE . SOME OF OUR EMPLOYEES CAN NOT AFFORD THE PRICES THEY WILL HAVE TO PAY IF WE COULD FIND A PLAN. ON JAN. 1 2014, IT WILL BE THE BIGGEST DAY OF LAY-OFFS IN HISTORY. WE NEED A CHANGE. TEMPS CAN HELP THIS COUNTRY GET BACK ON IT’S FEET.SOME BIG COMPANIES ARE GETTING EXEMPTIONS FROM THE LAW, HOW IS THAT ? WE NEED TO CHANGE EVERYONE IN WASHINGTON. LET’T HIRE SOME TEMPS WE KNOW THEY COULD DO THE JOB.
    THANKS
    GREG MOLLERE

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    • ALAN M

      If everyone is as obsessed about themselves as it seems in these comments, how can all of you fail to get that the middle class drives 70% of our economy. With the insane burden of health costs how can they be the serious consumers that makes our economy function. None of your companies or jobs exist without the prosperity of the middle class driving consumerism. Did all of you sleep through 1st year econ? There is no wealth or tax debate if the only way we can buy anything or pay federal income tax is by borrowing to do so. Single payer was too “socialized” for the GOP or TEA wingnuts but is the only real solution to end the madness. The rest of all of this is urinating into the wind (or on each other)

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      • Self Employed

        Single Payer???? You are asking me to pay for lifestyle choices of others I don’t agree with? No, I disagree. What I would support is everyone being required to purchase their own health insurance, not tied to their employer. But Health Insurance companies should be allowed to base it on their lifestyle choices like alcohol and tobacco use.

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        • Anonymous

          all insurance does that. the larger the insurance pool the more negotiating and buying power you have as well as spreading of risk

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      • steve8714

        The middle class only drives 70% of the demand side of the economy. The supply side is being chased offshore. The end result of Obamacare will be a huge black market in labor, a la Italy, with 40-50% of industry working off the books.

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        • gregg dourgarian

          Steve, you’re right, the black market a la Italy is indeed where we are headed. I spent a summer there by the way living with my cousins and back behind their apartment complex, on the other side of the vineyards, were unregistered businesses operating out of houses that by day had scores of factory workers making clothes and assembling products.

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      • Cindy Ingram

        Well, gosh, don’t stop there – why don’t we base insurance on extensive DNA tests – family history – your residential/work proximity to pollutants, where you buy your veggies, how much you drive, whether you pump your own gas, an attitude test, your mental health, how often you laugh, how much you exercise???????????????????????????? The whole point of progress SUPPOSEDLY was the betterment of mankind, but there is – once again – what I see as a dim-witted attempt by victim blaming people who truly think their success came about because they are somehow better than most or worked harder than most. They have no consideration for the luck of being born into a “well-bred” lineage or “happy circumstances”. You are largely a product of what you were born into – both physically and mentally. And if you were born into rotten circumstances, it is true THROUGH THE ENCOURAGEMENT OR EXPOSURE TO OTHERS, you might pick up by osmosis a picture of yourself as succeeding mentally and physically and change a predisposed life style. But, absent that light bulb going off, even you who think so highly of yourselves might have been the very underacheivers you blame. Stop being so damned negative in your assessment of others and in your solution reasoning.

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      • steve8714

        Alan, the middle class pushes most of the DEMAND side of the economy; we’re in trouble because of the SUPPLY side. Lack of investment in wealth-building industry (farming, mining, manufacturing) and the hostility of the Government to same is the reason we’re in the pickle wherin we find ourselves.
        This is government riding to the rescue after they create the danger.

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      • steve8714

        Alan; the middle class drives 70% of the consumption in our economy, but little of the capital investment. This is because of direct and indirect taxes. The wealthy have more left to save and invest (in raw numbers) but not percentage. Tax freedom day, the day you work for yourself, is later every year.
        Meanwhile Great Britain, which has your “single-payer” system, lets people die waiting for treatment and has bureaucrats deciding who is worth treating and who is not.
        The overweight and the smoker are left to die while the high-risk sexual practicioner is treated. Of course we musst treat the addict and pay for the sex change.
        Single payer makes your life, illness and death a matter of politics. Pray you’re in a favored group.

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  20. Warbo

    If I’m an employer, do I have to buy health insurance for my employees in India, or the Philippines? If I employ 49 people in America and 500 in other countries, am I still required to provide health care for the 49?

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    • Anonymous

      If not today – tomorrow you will. Producers require consumers to stay afloat and people around the world who weren’t part of a high standard of living before are dreaming of that now. American corps can whine and moan about the possible drop in the bucket they will suffer due to health care and they can move off shore, but there too, eventually, the everyday working person – the new consumer of the products – will demand a descent lifestyle. I am a college graduate, single woman, laid off two times in 6 years and I STILL WILL PAY MORE FOR A PRODUCT IF BUYING IT SUPPORTS THE U.S. WORKER. The problem is that I am more patriotic than the American corporation that is whining and moaning and supporting communist China – The U.S. corp squashed nationalist tendencies that were admirable in other countries and now is selling American out.

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  21. ALAN

    Hyperbole ( /haɪˈpɜrbəliː/ hy-pur-bə-lee;[1] Greek: ὑπερβολή hyperbolē, “exaggeration”) is the use of exaggeration as a rhetorical device or figure of speech. It may be used to evoke strong feelings or to create a strong impression, but is not meant to be taken literally.[2]
    Hyperboles are exaggerations to create emphasis or effect. As a literary device, hyperbole is often used in poetry, and is frequently encountered in casual speech. An example of hyperbole is: “The bag weighed a ton”.[3] Hyperbole helps to make the point that the bag was very heavy, although it is not probable that it would actually weigh a ton.
    In rhetoric, some other opposites of hyperbole are meiosis, litotes, understatement, and bathos (the ‘letdown’ after a hyperbole in a phrase).

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  22. Sick and Tired

    I am working for a Temp Staffing Agency in Texas. I was offered their available mini med plan for approx $1500 per year which provided $1000 worth of medical coverage. This provided up to six $35 co-pay office visits, a 10% prescription discount plan, 20% in-patient hospital coverage. Dental and vision were not even options.

    Glad my contract is up December 31, 2012.

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  23. doug

    no staffing company will have deep enough pockets to withstand any years!!! My friend has an agency that issues approximately 1,000 w2′s the past several years…. the majority of these employees work(ed) between 40 – 500 hours in any given year. The wages for the positions they fill are between $8-$12 hour, for figuring lets use an average of $10 and 500 hours and a billing mark up to the customer of 40% (which is a liittle high).
    over the $500 hours the employee made $5,000
    the company billed the client: $7,000
    the company pid prox 15% for payroll taxes, unemployment and workers comp = $600
    profit for the company is prox. $1.400 less expensese (that’s about $112 profit / wk)
    List of expenses:
    costs to run payroll
    costs of checks
    payroll department
    sales person
    recruiter
    administrator
    office lease
    phone bills
    electirc bill
    etc etc etc
    these are all UNAVOIDABLE costs of running any business.
    Anyways, how can a small, medium or large agency ever absorb the costs of healthcare for this part time employee and / or the $2,200 penalty for not providing benefits???
    O WAIT, someone had the bright idea of passing on the costs to the client….REALLY, $2,200 / 500 hours worked = $4.40 per hour penalty. that is a 44% penalty and that is if the person actually works the full 500 hours. what do we do with the person that quits after his first week because the position is not just right for him the agency has to find another employee to cover the 460 hours required to complete the job and maybe that person had a family emergency and worked 2 weeksand now another person comes into the position…..YES this happens ALLL the time. Is the employer/agency supposed to provide benefits for these people??? who is going to foot the bill for that?? NOT TO mention both of these people will probably qualify for unemployment and you can’t fight it!!!
    NOW with all those costs passed on to the client $!0/hour now becomes, $14.40 then $18.80 …. who do they pass on the costs of making a product?? the consumer …. c’mon people get real …. we want cheaper product not more expensive product that is why WALMART has gone to China!!!
    healthcare reform needs to happen to some degree but do not force this on the empolyer….I guarantee this will become a MESS and inflate.
    By the way, it’s my company and I built it from scratch and rolled the dice many times, some good some bad, if i make money i pay my taxes, contribute to charity and pay out bonuses BUT if i have a bad year or years because of the policiies in washington nobody will be here to bail me out!!!

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  24. margarette

    The real point is why should employers be forced to provide health insurance to anyone. We already pay workman’s comp. which cost some companies thousands of dollars per year. Employers originally offered health insurance to attract more skilled workers but now our socialist goverment says lets force all business with 50 or more full time employees to pay for it. For all you haters calling companies “greedy” and they should just pay and shut up should get off your butt and open your own business. I guarantee it would open your eyes to our over powering intrusive goverment. So for you Obama fans that say stick it to employers because someone “owes” me a job and healthcare than good luck even finding a full time job. You may end up with what you call “free” health care but with no job or at best a part time job. Forcing a business to provide health insurance is no different than saying you earn more than your neighbor so you should help pay for theirs. I bet you Obama fans wouldn’t like that. I do agree something needs to be done aboout health insurance. The goverment should set up health care exchanges so individuals have a place to buy affordable insurance but employers should not be forced pay any portion.

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  25. Someone

    Good. Staffing agencies are evil, terrorists, and should be put out of business. They are NOTORIOUS for underpaying workers and overcharging their clients.

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    • gregg dourgarian

      hi Someone….why do you write that? what have you seen? in your view is it only staffing businesses that are evil terrorists, or do banks, fast food restaurants, and clothing factories also have a place on your list?

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  26. Angie

    I have worked in the Staffing industry for over 17 years. I have been a recruiter, a sales rep, and I am now a regional manager over 6 offices. The people that we help and the services that we provide our clients are extremely valuable to all involved. I am amazed at the negative responses I see from people who have utilized our services. They were not forced to seek opportunities from Staffing services! They chose to do so. Obviously, they needed employment and the service of their choice did help them. The belief that the Staffing service took half or part of their income is ludicrous ! After all of the burdens are taken out, there is hardly any profit left. These people really need to become educated at the cost of employing an individual before vomiting all of this negativity!

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  27. Cindy Ingram

    If there is not much profit, why are they thriving up to this point? Have you ever been on the other end – and for how long? In my area agencies dominate the market and you are stuck, unable to refinance your home, unable to get health care, unable to invest, unable to look for permanent work rather than indefinite “temp to hire” that lasts up to three years. That is criminal and I don’t know how you can’t see that you are a tool for corporate greed. It’s carpetbagging. The real winners are the corporations and the agency. I sincerely am interested in numbers to back your argument up regarding 1/2 the pay. I’d appreciate it and I’m sure others would as well.

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    • I like temping

      If you don’t like the staffing industry, bypass it.

      For me, temping works out great because my skills are in high demand and I never have any trouble getting placed after a project ends. I get a fair salary, I live below my means and save up. I like having a 2 month vacation between 6 month projects, I don’t even need to collect unemployment and sometimes I even turn down a job because I’m enjoying my time off so much.

      Staffing companies don’t make a ton of money like you say. They are paying higher Workers’ Compensation premiums and have way more Unemployment claims. They have a much greater payroll responsibility which requires more employees to run payroll. They conduct massive amounts of time consuming interviews with people who are barely employable at times. They also have to sell constantly, competing with cutthroat margins by larger competitors. To top it off they also have much greater software costs than standard businesses to keep track of it all.

      I enjoy not having to look for a job. They find it for me.

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    • Larry

      Cindy,
      You really seem to be completely uneducated on how staffing works. If a company comes to our staffing agency to fill 20 positions – we do all of the screening, interviewing, background checks and drug screens. That is a cost that you cannot put a price on but its time consuming!
      Next, our staffing agency pays ALL workers comp fees for that worker – depending on the companies comp rate — this can be very expensive! We have payroll costs for more than 1,000 employees and our recruiters that do all of this work need to be paid too. Companies use staffing agencies because it eliminates alot of “hidden” costs for them by performing all of the tasks that I just mentioned.
      YOU go to work at an hourly rate that the company would have hired you in to start at so no one is “taking” any wages from you. Probably 75% of our jobs that we fill are temp to hire —- which means after approx. 6 weeks you can be hired on by the company as a fulltime employee and you are then elegible for the companies insurance, 401K and any other beneifits that they offer as well as a raise in pay that usually comes with being hired on fulltime.
      Our staffing agency assumes the costs and makes very minimal money from YOUR hours but when you take that small amount and multiply it by our hundreds of workers — then it does become a profit. However, YOU lost nothing in your pay as the company that hired us pays that cost.
      YOU got a job that hopefully turned into a fulltime job….the company that used our services got to see what kind of an employee that would be getting (by monitoring your tardiness/absenteeism, your work ethic and how you fit into their facility) and the staffing agency put you to work and made a small profit for providing its services but didn’t take ANY money from your pocket.

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          • Stanley Satan, HR Representative for the Evil Corporate Party

            Cindy, because of your unwavering dedication to uncovering the truth, we at the Evil Corporate Party have decided to let you win. We don’t know how you did it, but you’ve successfully discovered our secret plan to suck the livelihoods of the lower classes through staffing companies (a plan fondly referred to as “Satans Little Staffers” around the office).

            As a reward, we’d like to point you to the spot that just opened up in our upper management. We’ll have you field phone calls from staffers about terrible applicants, and then you can place those applicants in their proper places (homelessness, asylums, inner-city schools, etc.). All you have to do is move to India. Oh, and not that it matters, you being an intelligent and obviously resourceful person, but this position is temporary, so you’ll need to find something else in three months. Looking forward to your application!

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      • Cindy Ingram

        Yes I do understand all of this. I also wish you could live in Georgia a while and see how it is being used to save a buck. You can’t get an HR position here anymore – first thing outsourced. Unfortunately, greed has replaced real need.

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        • steve8714

          Oh, I see. You’re an HR person. If we’d known that going in we could’ve saved a lot of time and trouble with replies.

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        • Lisa

          Cindy- you seem to suggest with this post that you are in HR. If that is the case, I’m very surprised that you don’t have more of a clear understanding of the costs of employment.

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      • Richard Beato

        Really you just said it your self a raise in pay and benefits. Ok so what is the pitch used to get a company to use a staffing agency? Well you don’t have to worry about any of the hr work, and you dont have to provide them with benefits and you dont have to cover there workers comp we do that for you. You are at the liberty to fire them when ever you want (They can do this anyways in most state) or lay them off due to work slowing down and not have to pay them unemployment hidden fees lol what hidden fees 25 for a drug test maybe another 30 for a background check and most just buy drug test in bulk and do it them self. workers comp <=== ALL companies need this unless you use a temp. They say covering the payroll well yea the company pays the temp first ,and the temp pay's the slaves yes there is a small portion that goes to the recruiters but we all know they don't make anything to brag about unless its a recruiter/owner and what they would have a max of like 5 recruiters in most cases. So are you training the employees or something again in most cases no the employer is stuck training the temp to there liking but they dont complain because they can dismiss you at anytime or send you off of a roof top because they dont handle your workers comp. In some cases a worker/slave will get hired on ( Become a free man/woman) but in other cases this does not happen. Yea a recruiter has to do some work but it is minimal so minimal you have 18- 22 yr old doing her nail's behind her desk reading a resume with qualifications that she cant even pronounce. You say you find work for people!!! We never had a hard time in the past and now all of a sudden we do get real. You make money off of others hard work and claim you work hard too yea you work hard collecting your money I feel like you own a temp and that's why you are posting here.

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        • Secret Guest

          It’s always the employees that spend more time worrying about the invoices that the staffing companies receive that has the worst experiences working with staffing agencies. HMMMMM….

          If you are a $10 HR employee, how do you figure you should get $16.00 HR?

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  28. Richard Beato

    I think this is great a temp agency is nothing more then a 3rd party making money off of hard working american’s. It must be nice to sit in an office while you have your modern day slaves work for you with no benefits, and no promise of work in a week. So how do temp agencies work? And what overhead cost do they have? Well they make money off of you they get paid say 25 dollars an hr for you and pay you 17 or 18 an hr let say 18 an hr for an exp so the temp sits back and makes 7 an hr off of you while you get no benefits or job security. So if they have lets say 49 employees and they make 7 an hr off of each that in a 40 hr week would amount to $54,880!!! a weak that they did not work for and that does not count going into overtime just a straight week. And as stated above. “I Own 8 Staffing Companies and Have Placed over 100,000 people the last few years.” Wow lets try my equation with him you know what let only use half of that number so 50,000 and at 7 an hr for 1 week of some one else’s hard work they brought home an amazing 14,000,000 million and thats only half of what he said he employed over a couple of years so its safe to say 2 years. and im only accounting for the modern day slaves to have had worked for the said temp for only a week. Remember this is almost all profit they are making money almost like a bank but not off your money off of you. They should all be banned

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    • steve8714

      Richard, if a temp is paid $17/hour the true cost to the agency is between $20.40 and $21 per hour, more depending on work comp rates, and in fact the employee has to be paid before we can generate an invoice.
      Out of that $25 we have to pay rent and utilities, staff salaries and benefits, drug screens and background checks, and professional services like lawyers and accountants, as well as funding costs, 2-3% of the billing rate. Please don’t mistake markup for profit or even for margin. To net $1.70 at this pay and bill would require skillful management in this environment.

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    • steve shortland

      Now that I’m back let’s examine your math. In your dream world the service makes $7×49=343 per person x40 hours = $13,720.00.
      In real life, $1.70×40=68.00×49=$3332.
      Check your assumptions and your math.

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  29. David Gee

    It is interesting Richard that you would come to comment on a blog post about health care laws, and then ask, among other things, what overhead staffing companies have. Ahhh, they have employees, right? So they have health care and other benefits costs, and those are rising by any measure. And those employees have to work in a fixed location, and it costs money to buy or lease an office space, and then keep the lights and the heat and the air conditioning on. Those overhead costs have to come out of the bill rate.

    They have to find people like you to fill their job reqs, so they have recruitment costs. Typical expenses include advertising costs through different media, costs of services for background checks, drug tests, skills testing, reference checking, prior employment verification, etc.

    Then there are statutory obligations such as federal, state and local taxes, the aforementioned benefits, workers’ comp insurance, unemployment insurance, etc.

    There are ongoing contractor management and administration costs and expenses associated with payroll administration, contractor care, on-boarding and off-boarding.

    And the list goes on.

    Obviously there is money to be made in the staffing industry, and of course staffing companies need a willing workforce to make that money. But that arrangement doesn’t necessarily imply one party is gaining undue benefit to the detriment of the other. I certainly don’t think you are on very firm footing to call it modern day slavery.

    Staffing companies match millions of people to millions of jobs. 2.8 million people are employed by staffing companies every business day. 12.9 million temporary and contract employees are hired by U.S. staffing firms over the course of a year.
    79% of staffing employees work full time, virtually the same as the rest of the work force. Further, 88% of staffing employees say that temporary or contract work made them more employable.

    If staffing companies were to be banned as you suggest, the unemployment rate in this country would jump overnight. In the past few years, the U.S. staffing and recruiting industry has created more jobs than any other single industry in America, according to the U.S. Bureau of Labor.

    So avoid them like the plague if you want, send bad karma their way or whatever. But know that your math, and your conclusions, are both flawed. Thanks for the comment though.

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  30. Katie Danner

    I didn’t notice anyone commenting about temps that work irregular hours from a day or a week, calling in hung over or sick kid. Not all temp jobs have forty hours a week or the temps that are motivated.

    For an employer to be responsible for irregular employes is unfair and unprofitable.

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    • Secret Guest

      Wow. Some people are very ignorant about what it costs to run a business! Especially a staffing business. Who do they think pays the taxes and WC for temp employees? I am very scared of what the future holds, especially for people who are very ignorant of what the staffing industry is all about.

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  31. BAM

    A person who has placed 100,00 people over the past few years has more than enough money to BUY his entire company more than just health coverage. Dont feel bad for him as crying wolf never gets too much attention however, be very concerned with the gov controlling free enterprise growth!

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