Janitors and security guards are paid 20% less when they’re contractors, report says

By Shan Li

A boom in companies trying to cut costs by contracting out janitorial and security jobs has led to large pay disparities between workers doing the same jobs, according to a UC Berkeley report.

Janitors who work for California contractors earn on average $10.31 an hour, or 20% less than janitors who work directly for a company that uses their services, according to the report, prepared by the university’s Center for Labor Research and Education and released Tuesday.

Contracted security guards see the same wage gap, making $11.91 an hour, compared with the $14.48 an hour earned by other guards.

The wage gap has grown along with companies specializing in those services. From 1990 to 2014, state janitorial jobs rose 44%, and those in the security services industry increased 83%, the report found. That compares with 20% growth for all private sector jobs in the state.

“Many service workers have lost ground after decades of subcontracting that have driven labor standards lower,” said Sara Hinkley, the report’s coauthor.

Many contractors, especially smaller companies, also do not pay overtime or even minimum wage, Hinkley said. They often misclassify workers as independent contractors, thereby avoiding making Social Security contributions and sometimes even pocketing taxes that would normally be deducted from paychecks.

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[Source]: LA Times