Free-Splitting Revisited: Concealing Surplus Value in the Temporary Employment Relationship

Abstract

Based on a historical study of fee regulation in the employment agency business, the claim that temporary help agencies charge “no fees” to workers is challenged. It is found that the claim rests on technical changes in the statutory definitions of fee and employment agency won through industry lobbying efforts, changes that simply mask traditional fee-charging methods. The article traces the evolution of fee-charging practices in the post-World War II period and points to a new version of “fee splitting” as a prevalent wage setting practice in the staffing industry. The implications of these developments for wage depression and income redistribution are explored.