No one is forcing employers into performative hysterics, it's a reactionary choice by the corporate legal community. MSFT was guilty of what they were accused of. If they don't misclassify workers, they won't lose such a suit.
"The rest of the world is wrong, only I know the truth in this thread on a random web forum" is an unpersuasive frame to be arguing from. Corporate legal departments may be inflexible and hidebound, but they surely know this stuff better than you do.
No, this is the way it works. If you do what MS did and offer unrestricted perks to your temps, they'll sue you and you'll lose. Period.
What you're arguing amounts to "no one should hire temporary labor to work alongside salaried employees". And, OK, that's a position. But if that's what you want then you should make that case and not argue that somehow Viscaino doesn't exist, because it does.
Which Microsoft would never have hired them, if that was the case, they would have hired normal FTEs.
So either 1) hire contractors and treat them as contractors (without the employee style treatment), or be sued later.
Microsoft didn’t lose the lawsuit, they won a settlement — and their lawyers and lobbyists made sure it would never happen again.
Most corporations have preferred vendors and the 50% plus savings in salary and benefits has a large kickback that finds its way back to the employer.
The real issue that was skirted around in the lawsuit was that Microsoft actually owned the vendors that supplied them with contractors.