Some Answers to Questions about LRW

The day labor industry is a growing segment of the informal labor market and, through corporations like Labor Ready, making inroads into the formal labor market. For this reason, NAFFE is challenging the entire day labor industry to meet certain basic standards of fairness

Why is Labor Ready important?

With nearly $900 million in annual revenue, Labor Ready is the dominant player in the day labor industry. Labor Ready does not have any major national competitors, claiming a 14% market share, with the next five competitors combined accounting for 13%.[1]  Furthermore, the corporation is expanding internationally into the UK & Canada.[2] Its growth has made it the single largest employer in the construction industry.

Labor Ready has single mindedly applied a national “cookie-cutter” model—attempting to become the McDonalds of the day labor industry by applying a uniform operating model across the United States.

Labor Ready is also active in the legislative arena. In California, it opposed AB 880, a bill that would have helped counties recoup funds spent providing services needed to deal with the expansion of the temp industry; in Arizona, it sponsored a bill that would have allowed it to skim workers wages through check cashing fees.[3]

NAFFE’s campaign is calling for all agencies in the day labor industry to adhere to basic standards of fairness, and is challenging Labor Ready, as the industry leader, to set the pace.

Why are you so concerned about Labor Ready?

Several Labor Ready practices have infuriated workers and drawn the attention of organizers and advocates. These include charges that Labor Ready institutes check cashing fees, unpaid waiting times, transportation fees, safety equipment charges, and the blacklisting of employees. [4] Labor Ready has also exposed workers to unsafe work conditions, resulting in a high rate of injury.[5] A related concern is that Labor Ready has been misclassifying work assignments for the purposes workers compensation insurance.

Labor Ready’s business model—as described by CEO Joseph Sambataro—now requires that it exert “gross margin control” and train branch managers to “master the various elements that affect our gross margins.” However, Labor Ready is attempting to increase margins while revenues are not expanding. This effectively pressures managers to cut corners, which too often translates into fees, deductions, and unsafe conditions for workers.

Another source of concern about Labor Ready is its attempt to silence worker advocates through litigation. In a recent case, it tried to shut a website that exposed worker concerns.[6]

Who owns Labor Ready?

Boston-based FMR Corp (including three Fidelity funds) is the largest shareholder with 15.5% of stock. Others include Barclays Global Investors (8.46%), Wanger Asset Management (7.5%), and Wallace R. Weitz and Company (5.97%). Labor Ready officers and directors own only 2.36% of stock.[7]

What are you doing about non-profit hiring halls?

NAFFE members and day laborer have developed a set of guidelines for non-profit hiring halls. These are:

NAFFE members involved with day labor projects are encouraged to observe these guidelines. The “Challenge to the Day Labor Industry” applies to both non-profit and for-profit day-labor agencies.