March 08--The boom in companies specializing in janitorial or security services in California has led to large pay disparities between workers doing the same jobs, according to a report from UC Berkeley.
Janitors who work for contractors earn on average $10.31 an hour, or 20% less than janitors who work directly for a company that uses their services, according to the report, prepared by the university's Center for Labor Research and Education and released Tuesday.
Contracted security guards see the same wage gap, making $11.91 an hour, compared with the $14.48 an hour earned by other guards.
The wage gap is a growing problem in California as more companies have opted to cut costs by contracting out work in lieu of hiring full-time employees. Between 1990 and 2014, jobs in the janitorial industry rose by 44%, and those in the security services industry increased by 83%, the report found. That's compared to 20% growth for all private sector jobs in the state.
"Many service workers have lost ground after decades of subcontracting that have driven labor standards lower," said Sara Hinkley, the report's co-author.
Many contractors, especially smaller companies, also do not pay overtime or even minimum wage, Hinkley said. They often misclassify workers as independent contractors, thereby avoiding making social security contributions and sometimes even pocketing taxes that would normally be deducted from paychecks.
Health insurance is another area in which service employees who work for contractors often lose out, researchers found.
Between 2012 and 2014, 45% of janitors and 32% of security guards employed by contractors had no health insurance. Service workers who belong to unions receive family coverage if they are full-time employees.
Last year, the National Labor Relations Board ruled that companies using workers hired by another business -- such as contractors and staffing agencies -- are still on the hook for labor violations and could be required to bargain with unions representing those employees.
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