Unhealthy practices in warehouse outsourcing in US

It is going to be a tough time for the companies outsourcing their process. A new report entitled, “Chain of Greed” by National Employment Law Project, a New York based group criticizes outsourcing and use of staffing firms for the same. The report recommends authorities to get tougher to companies who outsource their activities to enforce better working conditions for employees.

The report published makes a close observation on the warehouse activities of the popular Walmart retail chain in US. Walmart is well known for its low pricing strategy that it offers. But not many are aware that Walmart is not rated high among its suppliers and the subcontractor staffs for the poor wages that they offer to their employees. The report says that the workers are subjected to low pay and hazardous working condition.

Walmart Store

Walmart favors the low price strategy offered to its customers by enforcing the low price policy throughout the supply chain. As per the report, Walmart insists all the suppliers and contractors to reduce their price of goods, increase quality and delivery speed of goods which makes the contractors pay low employment wages, compromise on the safety measures and violate the labor laws.

The reports indicate that outsourced workers of Walmart are put to suffer at the bottom level and the situation is getting worse with a number of intermediaries following these unhealthy practices and vulnerable employment schemes. This makes the workers toil under an unsafe working condition and leaves them puzzled as where to seek justice. The report claims to have evidence in support of these allegations against Walmart outsourcing policy. They have cited a lawsuit filed by some employees where it was alleged that Walmart is engaging in the daily operations of the logistics service provider, Schneider in US, either directly by employing their managers on site or indirectly by monitoring their operations. The employees are made to work for extra hours with no overtime pay, paying only for loading and unloading works and not for other works performed under hazardous working condition.

In this scenario, the importance of the Code of good practices signed between the Philippines labor department and outsourcing companies can be highlighted. The code signed was mainly to ensure peace and harmony in the nation as well as to provide extra security to the employees.

The report has made some suggestions to fix the issues:

  1. Bring out strong codes of conduct to be followed by the outsourcing companies.
  2. Evaluate the scope of contracting out and its impact on the workers.
  3. Bring in innovative laws and enforce the laws against the abuses on outsourcing employees.
  4. Enforce existing labor laws with immediate effect.

Employee relations are anyway going to get discussed a lot in the US market now.




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