A Profile of Labor Ready

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LRW Profile
Legal Matters
Labor Ready is the nation’s leading provider of temporary manual labor to construction and small business markets. It was founded in 1989 by Ex-CEO Glenn Welstad, whose ambition was to make LRW the “McDonald’s of the temp industry.” Through his fast-growth approach, Welstad expanded LRW into the largest commercial day labor company, with an accumulation to date of over $9 billion dollars generated in revenue. Now headed by President and former Chief Financial Officer Joe Sambataro, Labor Ready claims to have employed over 600,000 workers and served 275,000 clients in the past year.

LRW transformed day labor into a for-profit industry, focusing on construction, transportation, warehousing, hospitality, landscaping, light manufacturing, retail, sanitation and printing industries. LRW had 748 operating branches, as of December 31, 2002, consisting of 686 dispatch offices in the United States, Puerto Rico, Canada and the United Kingdom. LRW has remained the unrivaled leader in its industry, dominating 14% of the $5 billion industry, compared to 13% controlled by its 5 biggest competitors combined. However, its profits have dropped from 2.5% in mid-2000 to 1.3% by the end of 2002. Presently, LRW faces stalled growth, lagging sales and profits, crashing share price, and most prominently, increasing problems over worker rights issues.

Workers Rights

Although LRW proudly claims to put 600,000 people to work, it fails to mention that its jobs perpetuate a cycle of poverty and homelessness. The average worker is employed by LRW for a total of only 90 hours. After fees and deductions, workers often earn less than minimum wage, and get no benefits. In addition, Labor Ready workers face a staggering rate of injury. The Since June 2000, LRW has been targeted for a broad range of abuses and violations. These include:

bulletLabor law violation: LRW faces many suits because of its violation of labor laws, including its failure to provide workers with written job descriptions, provide benefits, pay workers for overtime or waiting time, and for its trend of blocking labor friendly laws, such as protection from discrimination and the right to organize.
bulletImproper deductions from workers’ pay: Many LRW locations deduct for equipment and transportation, or charge random fees to be paid in cash, which will generally push worker wages below minimum wage. LRW’s most controversial—and profitable—practice is to pay workers daily in cash through its Cash Dispensing Machines. Workers get cash on the spot, minus a $1 dollar transaction fee and the loose change (potentially another 99 cents in fees). In the year 2000, these fees generated $8.3 million dollars and fees!
bulletWorkers’ comp irregularities: Many reports indicate that LRW has misclassified its workers and underreported injuries in order to cut its comp costs.
bulletHealth and safety violations: The average LRW worker stands a one-in-four chance of being injured, and is five times more likely to get hurt than a miner, and three times more likely to get hurt than the average construction worker.
bulletPrevailing wage rate: LRW has been found in violation of this on several occasions. In just about every instance, the contracting agency has been billed for wages based on the prevailing wage rate, but somebody other than the worker took the money.
bulletTransportation violations: In the instances when LRW provides transportation, it often fails to comply with vehicle safety standards and adequate insurance. LRW also provides for workers to transport other workers so that the company does not hold responsibility for injuries and accidents.



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