Independent Contractors: This Gun’s For Hire

Recently an acquaintance of mine at a California state agency complained about independent contractors at his workplace.

“They come in when they please, sit around, don’t do anything, and I get stuck with all the work. AND they’re falsifying their results to look bad when in fact things aren’t that bad. They’re getting federal monies they shouldn’t so they can keep getting their fat salaries. Oh, did I mention they make a lot more than I do even though I’ve been there for years. What do you think Nan, should I blow the whistle?”

I pointed out to my acquaintance that in spite of so-called protections, most whistleblowers get fired, and if they appeal, they wind up losing. But I missed the real reason why he should be wary of complaining.

Traditionally, independent contractors were white-collar women and blue-collar men hired by private employment agencies such as Manpower or Kelly Girls rather than state employment agencies. These “temps” were hired on a short-term basis to fill-in for regular staff at other companies. Companies paid a lot for these “temporary employees,” but the temps earned below market rates and received no benefits.

With the rise of “Silicon Valley” type companies this changed. These companies needed technical specialists, innovators, and management experts. The independent contractor of the 1990s was often a computer or scientific research consultant with special expertise. These experts weren’t temporary replacements for existing workers. They were brought into a company to solve problems the regular managers and employees of the company couldn’t. Some were even brought in to “reorganize” companies, i.e., layoff employees.

The jig was up at the end of the last century after Microsoft Corporation created “dummy employment agencies” and hired droves of “independent contractors” in lieu of computer-savvy employees at its headquarters in the state of Washington. This put Microsoft in violation of federal employment laws that protected employees. After that, the IRS cracked down hard on private employers who hired independent contractors as a way to avoid paying employee benefits.

During the Bush administration of the past eight years, the use of independent contractors by government agencies escalated dramatically. Often these independent contractors were retired workers on pensions, and the government had the same motives as Microsoft—to save money on salaries by not having to pay worker benefits. In other cases, outsourcing of government jobs was seen as an effective way to bring innovation into the bureaucratic government workplace. More than that, many politicians assumed uncritically that any effort to replace civil servants with private labor would be beneficial. Even your mail deliverer could now be an independent contractor.

Recent scandals at the federal government level have created some doubts about this practice. First, it was revealed that contract workers in Washington, DC had released private records of celebrities and politicians. But the government could not discipline these workers. They could only be fired after the fact. Doubts arose too in cases where private soldiers, not punishable under military law, were accused of killing civilians in foreign countries.

But the biggest issue for everyone, regardless of political philosophy, is why some of these “private civil servants” are being paid more than their government counterparts. How is this reducing the size of government bureaucracy or government costs? And when charges of indiscriminate killing or unethical research falsification are raised, doesn’t it make you wonder what is going on?

My acquaintance went awry when he assumed independent contractors were additional help brought in by his state agency to do the same job as he was at a higher salary. Clearly the “hired guns” were given a different mandate by his managers than he was. Those temporary contract scientists were probably hired because they were willing to “bend their statistics” so the government agency they were at could get more funding. Civil servants with scientific credentials couldn’t have been persuaded to do that at any price.

Highly paid independent contractors are paid more because they have some form of “expertise” that an agency or organization believes its own managers cannot or will not provide. Because of their special talents they have to be compensated for their special abilities at a higher level of salary, and they get additional perks, such as the right to come to work whenever they feel like it.

The main problem with independent contractors is that they allow management to bring in personnel to easily circumvent the publicly accepted goals and rules of an agency or organization for some particular individual or group’s private benefit. This can result in a tremendous, and even dangerous, waste of resources. We all, as taxpayers and donors to charitable organizations, deserve better when we pool our resources so that our government and nonprofit agencies can bring about some kind of “public good.”

And as far as my friend’s dilemma goes, unless he goes to the news media, whistle blowing will rarely be effective while higher management is involved and covering up.

Copyright © 2009 Nancy K. Humphreys