President Barack Obama’s new effort to combat pay discrimination won’t help one of the fastest-growing parts of the American workforce: temporary workers.

The administration is proposing a new requirement that all companies with more than 100 employees report what they pay workers by race, ethnicity and sex. The Equal Employment Opportunity Commission already collects data on the workforce demographics of large companies, in order to spot hiring discrimination. The new rule would add pay information, which the EEOC then could use to investigate gender or racial pay gaps.

“Collecting this pay data will help fill a critical void in the information we need to ensure that American workers are not shortchanged for their hard work,” said EEOC chairwoman Jenny Yang as part of the announcement.

But government data has a big loophole: Companies aren’t required to report data on temp workers.

A recent Reveal investigation found a nationwide pattern of hiring discrimination in the industry, in which companies ask temp agencies to provide only white workers, for example, or only men. Some former temp agency recruiters say that extends to pay discrimination as well. Agencies sometimes relegate black workers to inferior positions with lower wages, some said. Women often are slotted into lower-paying positions as well, according to a report by the Center for Women and Work at Rutgers University and the advocacy group New Labor.

None of that will show up with the new regulations. The staffing industry pushed for an exemption to reporting temp workers back in the 1960s, which means temps won’t be counted in the pay data either.

With changes in the economy and growth of the temp workforce, the exclusion doesn’t make sense anymore, said Donald Tomaskovic-Devey, a sociology professor at the University of Massachusetts Amherst.

“They made the rules up in 1965 … and it probably made total sense back then,” he said. “Right now, it seems crazy.”

The EEOC is considering whether to close that loophole. It would first need to conduct a study, and that depends on commission resources, a spokeswoman said.

Even if the government decided to include temp workers at some point, the industry could argue that it’s not feasible, said George Reardon, a Houston attorney who represents temp agencies.

“Temporary employees go off on different assignments to different clients, and their pay rate may be different every time they go out,” he told Reveal. “It presents a lot more practical problems than a regular permanent workforce.”

In the meantime, business groups like the U.S. Chamber of Commerce are speaking out against the new rules, which now are undergoing a public comment period. If adopted, they would go into effect in 2017.

 

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Will Evans is a senior reporter and producer for Reveal, covering labor and tech. His reporting has prompted government investigations, legislation, reforms and prosecutions. A series on working conditions at Amazon warehouses was a finalist for a Pulitzer Prize and won a Gerald Loeb Award. His work has also won multiple Investigative Reporters and Editors Awards, including for a series on safety problems at Tesla. Other investigations have exposed secret spying at Uber, illegal discrimination in the temp industry and rampant fraud in California's drug rehab system for the poor. Prior to joining The Center for Investigative Reporting in 2005, Evans was a reporter at The Sacramento Bee. He is based in Reveal's Emeryville, California, office.