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Microsoft court battle turns spotlight on role of 'temps' in the workplace

MindSpring Enterprises, a fast-growing Internet provider, increasingly relies on a temp agency to supply a stream of workers for its call-in centers. But the company is careful to offer them staff jobs or replace them after 90 days.

Like a growing number of companies, Atlanta-based MindSpring uses temporary workers to cut costs and solve labor shortages.But temporary workers are increasingly demanding employee benefits if they work as long and hard as permanent workers, compelling wary businesses like MindSpring to take steps so temps don't become de facto employees.

A closely watched court battle between Microsoft Corp. and its longtime temps -- dubbed "permatemps" -- is the most visible sign of this growing workplace issue.

In the latest twist to the case, a U.S. appeals court panel ruled in mid-May that thousands of former temps should have been allowed to join the company's lucrative stock-purchase program. Last Wednesday, Microsoft asked the full appeals court to review the decision.

The ruling was the first to hold that temps can look to both their agency and their work-site employer for benefits. It raises the specter that employers will be liable for everything from temps' benefits to their grievances.

"(It) is another reminder . . . that they just can't change the label or badge and turn them into a non-employee," said Catherine Ruckelshaus, litigation director at the National Employment Law Project, an advocacy group for low-wage workers.

Since 1982, the percentage of temps has quadrupled to 2.2 percent of all workers, according to forthcoming data from the Economic Policy Institute, a think tank. On any given day, about 1.3 million temps are at work, spawning an estimated $60 billion industry.

Up to 90 percent of U.S. companies use temps, often because they provide a flexible, quick and cheaper source of labor.

Temps, who are mostly women, are clustered in low-paying work, such as secretarial jobs, and most would prefer a permanent job.