LABOR, CAREER AND LIBERTARIANS

(There was an xml/xsl Word software problem that affected the links. I will have to resupply many of them later. The file has been converted to Frontpage HTML (instead of HTML from Word).)

 Paradigm                     Employee or Free-Lancer?

                Possible new legislation   Links

“Real Jobs”    

Staged Retirements

Severance

Workweek

Unemployment Insurance 

Psychological Tests

Up or Out

Reference Checking

Drug Testing

New FSLA rules

NY Times on Overtime

Background Checks

Off the Clock  

 

Discussion of Outsourcing and Offshoring (on http://www.doaskdotell.com)

In 1988, the Supreme Court (in Communication Workers v. Beck) ruled that a labor union member is entitled to a refund of that part of his union dues that are used to fund political contributions. The Court did say that a member who makes such a request may be required to relinquish his voting rights in the union-that is, give up his union membership.

In practice, union members are not told of this right and may feel intimidated against enforcing it. In 1993 President Clinton actually rescinded a previous executive order to enforce this ruling. In 1998, Congress is considering a Payroll Protection act which would prohibit both labor unions and employers from using money withheld from pay for political contributions without the worker's consent. California is considering a similar proposition by referendum (It was defeated on June 2, 1998).

Under payroll protection laws, workers retain their membership and voting rights, and the scope of "political activity" defined for the purposes of protection may be quite narrow in practice. See Michael W. Lynch, "Protection racket: The Right's favorite campaign reform idea sounds too good to be true. It is," in National Review, June 22, 1998, p. 40.

Libertarians may feel both ways about this issue, and indeed about state right to work laws. These measures may seem against libertarian ideology because they seem to interfere with the "right to contract." In practice, employers and unions sometimes exercise undue control over worker's lives, supposedly for their own good. Both sometimes employers and especially unions tend to behave as if they should do all the thinking and speaking for individual workers. Unions will require workers to strike for causes workers may not individually believe in. Single or gay workers might be expected to strike some time for partially or fully paid maternity or paternity leave some day (or even family health care benefits not available to them until the company offers domestic partnership benefits, and even these would be post-tax without legal recognition for same-sex marriage) . But similarly, companies with regional monopolies (such as electric utilities) use customer's charges to fund specific political candidates.

Particularly controversial has been the tendency for some companies to move overseas, to Mexico or to third world countries for cheaper labor. Free trade (NAFTA, GATT) supposedly encourages this, and the Pat Buchanan’s of the world will fight hard for blue-collar workers (there was a film, Blue Collar, in 1978) from a socially conservative almost leftist perspective. You can say that free trade of labor gives poorer countries leverage against the American worker’s standard of living. But it’s supposed to be illegal to close a plant and move overseas just to prevent unionization, although this is hard to prove by the standards of the National Labor Relations Board. A recent victory for labor in this issue, though, was won against the Quadrtech Corporation or Gardena, CA (Wall Street Journal, Dec. 5, 2000). 

Organizing is finally reaching even freelancers, as with the National Writers Union, although from a psychological perspective this will probably lead to a lot of tension. (Yup, freelancing and union organizing sounds like an oxymoron, almost, as some people see it, like gay marriage. But it’s real, too.)  Troubling are attempts by some large publishers to force freelancers to give them all electronic publishing and other rights before doing business at all—something that sounds like Goliath v. the David’s. Computer workers and programmers are traditionally very difficult to organize because of their psychological independence and individualism, and general salary success (and steadier employment) without unions. However computer profressionals, like freelance writers, are running into a trend towards requiring freelancers to go through broker companies that get their take. 

In principle, manpower firms which pool workers and even self-managed work-teams may in practice have some of the characteristics and powers that unions have today. That is, to determine rules and leave and pay practices (on such sensitive issues as paid family leave which others must pay for) without state interference. When these decisions are made within small groups, they seem much less intrusive upon individual liberties even when they give preferences to some individuals based on their real needs or dependent responsibilities.

The right to organize unions and to collective bargaining is well accepted by tradition, state and federal laws, and the 1948 Universal Declaration of Human Rights. Nevertheless, in practice, some employers to harass or fire employees for attemped unionizing and “get away with it” (as in the 1981 film Coal Miner’s Daughter). This problem is addressed by Cornell University professor Lance Compa with his Human Rights Watch. 

A major new reference is:

Uchitelle, Peter. The Disposable American: Layoffs and their Consequences. New York: Knopf, 2002. A portion was printed in The New York Times business section, March 26, 2005, “Retraining Laid-Off Workers, But for What?”

Many skilled workers are having great difficulty maintaining anything like their current level of compensation and benefits, as they compete with people with lower standards of living. The Times article showed a wastebasket with workers in it.

PARADIGM for a fair workplace:

Two kinds of "employment"

  1. You work for another party (usually a company, organization or government) which intends to employ you indefinitely. If the party is a company, it may be a manufacturer, consumer service provider, or provider of consulting or facilities management services to other organizations.  The employer is responsible for withholding tax and social security contributions.   The employer generally is liable for its employees’ actions and generally  (except in medicine and some other professions such as journalism) employees do not have to provide their own liability insurance (and this is actually a significant hidden “benefit” of conventional employment, although officers are sometimes held personally liable for violations of law or fraud and non-officer management employees sometimes are named as defendants in discrimination cases, although rarely found accountable in actual verdicts)). There are several forms of compensation:

(1a) Hourly wage (it is generally illegal to substitute "comp" time for overtime for hourly workers). An hourly wage makes sense when the work is relatively repetitive, even regimented, and where productivity (or job performance) per unit of time can be reliably predicted and measured.

(1b) Salary (for exempt) (It is generally illegal to pay overtime or offer comp time for salaried workers [at least when they are regarded as “management”], except as performance bonuses, but see below.). Salaried work is much less regimented than hourly work and generally involves managerial or advanced technical skills (as specified in the Fair Labor Standards Act). A salaried, exempt associate agrees to "own" an agreed-upon job responsibility and takes the personal risk of unpaid overtime and sometimes of the use of his own resources (not including out-of-area travel).

(1c) Commissions

(1d) Piecework

(1e) Combinations of the above

(1f) Employers that pay wages or salaries are required by law to provide some minimal benefits (such as 50% social security tax and unemployment insurance). In practice, employers often (because of market forces or labor contracts) provide health insurance, paid vacations, disability insurance. Employers over a certain size generally must obey civil rights laws.

> (1g) In return, employees are expected to owe the employer "loyalty" and avoid conflicts of interest. This concept has been eroded in recent years by the tendency of employers to "hire and fire" during mergers and downsizings. As a matter of business ethics, employers should fill short-term needs with other consulting service firms or independent contractors, not with "salaried" employees.

(1h) Some employees (usually salaried managers) also implicitly surrender their "right of publicity" when part of their job responsibility is to speak publicly (or sell) for their employer.

(1j)  Salaried employment is subject to “employment at will,” but in practice is often much more stable than contracting (where contracts are often short-term).

(2) Persons ("independent contractors") who work for themselves (and not even other service firms) as their own "brands." In principle, people who work for themselves are more likely to be able to do what they want to do if they can find customers who desire what they want to offer. Persons who want to use their own name recognition for their own expressive purposes should prefer this kind of work when possible. Federal laws discourage self-employment, particularly in the way employer-provided health insurance is provided with before-tax dollars and (arguably) with the way social security tax is levied, as well as with additional tax-reporting requirements.  Independent contractors often must incorporate, provide their own tax-id’s and licenses and training, obtain their own professional liability and (sometimes) media risks insurance (especially costly), as well as workman’s compensation, in order to get work.  Some “broker” agencies arrange clients for these persons without actually offering benefits (but will still require insurance). It would be desirable if such persons could combine and purchase benefits as a group. An intermediate solution, common in information systems, is the company that employs professionals as its own W-2 employees, places contractors with clients and offers some payment for time "on the bench." In some cases, W-2 employees may be paid “hourly” (including time-and-materials and overtime) if they agree to do without other “benefits” (other than the middleman company’s liability coverage); this “pseudo-hourly” may not be acceptable in situations where unions or large numbers of other hourly employees may be present.  Because contracting has become more expensive for companies, they have recently tended to use only contractors who work with preferred providers or agencies.  In this cases, the middleman company will own a claim on the publicity rights of the W-2 (hourly or salaried) worker (and may be concerned about, say, the worker’s “reputation” on the Internet) unless the work itself involves little discretion.

Independent contractors may agree to be paid only upon completion of a task (or of intermediate deliverables), or may charge time and materials when the cost in time in materials can reasonably be predicted in advance. Totally independent contractors generally must carry their own professional liability insurance to get work.

Mary Ellen Slayter wrote an article, “Independent Contractors, Pure Gold for Employers,” in the November 23, 2003 The Washington Post, section K. She maintains that there are only employees and contractors, nothing in between. Contractors are reported on at 1099-MISC, so W-2 employees are still technically “employees” even if they relinquish most benefits  to get work.

The Employee-Freelancing Debate: Some Remarks about Employment Form

 

> In Do Ask, Do Tell, Chapter 5 I spent a lot of space covering the “downward mobility” of salaried professionals during various past economic downturns, especially in the late 1980’s and early 1990’s. During that time the hype was to treat yourself as a one-person company, even of you were salaried, and view your job as entrepreneurial (“you pay them to work there” or “I’ll work for free”). 

 

Some companies “fired” much of their salaried staff and then “rehired” them as freelancers, without having to pay benefits. Others offered to pay piecework in view of layoffs.  Companies suggested that if workers were more flexible, more willing to invest in their own job-readiness and willing to vary their pay with economic adjustments and do without the perks, workers would remain employed.  Of course, major benefits like health care were put at odds with corporate profits, apparently.

 

The economy turned around during the 1990’s (the “Clinton years”), with the largest reason being that in 1992 the government allowed the public to use the Internet.  While distributed and layered, object-oriented, external-user-weighted information technology was developing so rapidly that conventional businesses and IT professionals hardly knew what was happening, employers discovered that they could be more profitable if they lured the best talent with good benefits and sometimes family-friendly culture, whereas free-lancers often cost them more and tended to take away a valuable knowledge base.  So the wild pendulum swung and begged to be stalked.

 

What has come about is a pretty confusing picture.  A few years ago, we were treating a lot of salaried people almost as if they were contractors, while positing the “entrepreneurial” workplace!  No wonder people would fight back, and want to take control of the expressive purposes of their own work. 

 

Contracting will make a lot of sense in situations like these: (1) A person gets health care from a spouse’s or domestic partner’s benefits  (2) A retired person gets health care through a pension plan or even annuity or 401K or Cobra, has received a big severance and wants “double income.” It also makes sense if a person has varied interests and (particularly for someone with publishing, entertainment or media interests) wants to pursue some of them for later income while continuing to work sporadically in an established “profession.”  This is especially true now since the Internet has made possible so many unusual home-based business models.

 

The big challenge in the new world of contracting will be balancing professionalism with adventurism and personal intellectual innovation.  Contractors will face a world in which there are considerable expenses: incorporation, professional liability insurance, zoning and other regulations.  In some cases it may be difficult to reconcile expectations for future careers with the demands of insurers, professional associations and government while continuing to work in an area outside of where one already has a track record. 

 

One could say, if you are a contractor you must perform as a professional, and be regarded by the customer as an “ultimate” resource to fix a problem (you become the “they”).  So you must be completely committed to your profession and maintaining your skills.  So contracting is probably not for those who just want an interim paycheck or who want to underbid those who need health insurance.  But one could may the same comment (regarding professionalism) about salaried exempt employment, too.  Perhaps only hourly workers can just say, “I just work here.”  

 

A variation of contraction occurs with the use of “guilds” of freelancers.  This is already common in entertainment (such as directors’ and actos’ guilds) and may become more common for other professions, and gradually replace “manpower” companies.  A guild could provide professional accreditation and group benefits (especially health and liability insurance) but will have to deal with the “political” problems of members competing with one another rather than showing “solidarity.” (See Fast Company, May 2001, p. 136).

 

Employees generally do not face the risk of personal liability as contractors or officers, but there are some troubling situations. Debt collectors can be held liable for violations of the Fair Debt Collection Practices Act (FDCPA) up to $1000 or 1% of net worth for violation, but actual judgments against individual collectors are rather uncommon. Sometimes store clerks and bartenders are civilly or criminally liable for failing to check ID’s and selling tobacco (under 18) or alcohol (usually under 21) to minors.

 

The growth of franchising may mean that there will be a tendency to expect people to “invest” more in their own careers. A franchise owner, however, is perceived by the public as connected to the company and as promoting the company, and does not have as much freedom as a real contractor.
 

 

New York Times publishes story on overtime controversy

 

On September 17, 2000 The New York Times ran a story “Expanding Workweek Makes Exhaustion an Issue,” by Mike Walsh. There was a story about a utility worker, Brent Churchill, who died from an accident in Maine after extraordinary (paid) overtime while restoring power after a storm.  There is pressure both in Congress and in state legislatures to limit employer-mandated overtime, mainly for hourly workers (ironically getting worse in a tight trade-related labor market, but also motivated by the mathematical behavior of benefit costs as workers are added). (But maybe the most egregious example of this has been the problem of salaried hospital physician interns working 36-hour shifts, which some states are trying to limit).  The news story reports that “measures under consideration identify several types of information economy workers—including computer network analysts and database administrators and even funeral directors—and specifically define them as management, barred from receiving overtime pay.”  The motivation appears to be political: labor unions do not want well-salaried professionals (which they view as “management”) whom they believe indirectly benefit from the labor movement to receive the “benefits” of overtime without union membership and without some of the regimentation of many hourly jobs (and without the expectation of “solidarity”—the willingness to go on strike for a colleague’s needs).  It is important to remember that the limitations on one’s whereabouts placed by being on-call do not qualify for compensation in a salaried environment, either.  Employers are between a rock and a hard place in complying with labor laws (FLSA, Fair Labor Standards Act) dating back to 1938.  If Congress declared computer professionals as “management” as a matter of law, it could (“accidentally”) trigger other conflict of interest problems, limiting outside work political activism, moonlighting, authoring and publishing, especially on the Internet.

 

An article, “California Writers Win Overtime Pay,” by Bruce Hartford, in Summer 2000 American Writer (published by the National Writers Union) elaborates further on the overtime issue.  “Salaried” technical writers, web designers, and some computer programmers have won the right to overtime pay in California  (Law AB60, the “Eight-Hour Day Restoration and Workplace Fexlibility Act of 1999) when employed by third-party consulting or manpower companies when these companies themselves bill for overtime hours and when the workers are closely supervised or make less than a certain wage. Overtime for “salaried” people has been resisted [out of fairness to hourly people and contractors] because a “salary” implies both certain discretion in job performance, certain end accountability for results, loyalty, and lack of regimentation; whereas hourly people are paid for the time actually spent.  But overtime could be justified as good public policy (with respect to potential changes in the FLSA or similar state laws, regardless of political motives) in some situations: (1) the employee’s job productivity is measured in billable hours, the mechanics of the job justify this kind of evaluation, and an intermediary is gaining financially by a billable hours contract or method (2) the employee works significant overtime when other employees are absent, particularly because of illness or family emergencies [an issue important to childless and single people and indirectly gays and lesbians]   (3) the employee works significant overtime because of demonstrated negligence by another party or vendor

 

When salaried employees are unable to go the extra miles because of illness, family obligations, or even religious commitment—all accepted reasons—others may have to pick up the slack at their own expense.  This ill-noticed observation can provoke potentially confounding problems in the workplace in the areas of compliance with labor standards laws, hostile workplace, and discrimination issues.  For example, persons with dependents may sometimes be able to pressure (coworker) “singletons” to “sacrifice” off-hours time and freedom (see Baby Boon (Elinor Burkett) book review) so that working parents can spend more time with their children despite a competitive workplace, and this possibility makes the same-sex marriage issue even more important if gays are not to be second-class citizens. Government may very well need to get out of the way. 

 

The Bush administration created controversy with new administrative overtime rules in 2003, which might expand the exempt category to “learned excerpts,” even when the experience came from military service. Kristin Downey, “Forms Plan Expansion of Overtime Exemptions,” The Washington Post, Jan. 29, 2004. The management euphemism for exempt status was always, “you don’t have to punch a time clock.”

 

 Off the Clock

 

Steven Greenhouse presents a story “Forced to Work off the Clock, some fight back,” and “Lawsuits and Change at Wal-Mart” on November 19, 2004 in The New York Times. In various companies, especially retail and personal service, middle managers sometimes extort hourly employees into working unpaid overtime in order to make their bottom line, even against company policy. Some phone banks require employees to report fifteen minutes early and be logged in to their computers when the clocks start, just as other businesses sometimes requires employees to be in uniform when a shift starts,

 

New FLSA rules

On August 23, 2004 new overtime regulations previously announced by the Department of Labor (as an interpretation of the Fair Labor Standards Act, FSLA – the DOL document is http://www.dol.gov/esa/regs/fedreg/proposed/2003033101.pdf) go into effect. The rules are complicated and guarantee overtime pay to most lower-income workers but might make some skilled employees (administrative, executive, managerial, or “professional”) who use a great deal of discretion in their jobs exempt. There is particularly a lot of concern about the effect on nurses. Companies might be tempted to make employees assistant managers to make them exempt (it is not clear yet that this would always “work,” but managerial classification can also cause conflict of interest problems, as documented elsewhere on this site).  In a Center for Data Analysis Report #04-08 by Kirk A. Johnson “Who Benefits from the New Overtime Regulations? A Data Analysis of the U.S. Department of Labor’s Assessment” at http://www.heritage.org/Research/Labor/cda04-08.cfm  Johnson disagrees with an Economy Policy Institute analysis that up to six million workers could lose overtime pay. As a computer professional, I was never paid for on-call duties, most of the time did them at my own expense (even I took the calls for employees with families) and usually did not take comp time.

 

Here are some Web references (including liability insurance companies):

 

http://workerstatus.com/

 

http://vanblk.com/articles/Employee_or_contractor.html

 

http://jobsearchtech.about.com/careers/jobsearchtech/library/weekly/aa083099-3.htm

 

http://www.techinsurance.com/

INSUREMEDIA.COM Business insurance, technology insurance, professional liability insurance and general liability insurance and free online business insurance quotes for information technology companies, computer professionals, consultants, software developers, programmers, start-up IT business and Internet companies.

What is a “Real Job”?

On April 9, 2001 the Minneapolis Star Tribune published a commentary, “Hardly Working,”  by Fred Zimmerman, in which the writer argues that the American economy is vulnerable because it does less “real work” or “tangible production,” (manufacturing, for example) than other worldwide economies, as evidenced by trade deficits, dependence upon imported oil, and a high percentage of service jobs.  Zimmerman argues that America has “gotten away” with this because other parts of the world have in the past been more troubled.  This reminds me of my own father’s imploration to “learn to work,” and of left-wing (and Luddite) ideas about the glories of peasantry and manual labor.  Remember that technology and automation will tend to eliminate old-fashioned “real jobs” (although custodial care and nursing are great exceptions).

Taking “real jobs” is sometimes suggested as necessary in economic downturn. Why should white-collar professionals be pampered with extended unemployment benefits, it could be argued, when there are low-paying jobs are airport screeners or nursing home attendants to be filled—shouldn’t everybody pay his dues? On Feb 9, 2002, in the St. Paul Pioneer Press, Amy Lindgren, in “Interim Interests” talked about her interim jobs in “waitressing, delivering newspapers, unloading UPS trucks, and dispatching security guards on the night shift.” Employers don’t expect people to hold these jobs for a long time, she says. But some employers will be unwilling to hire uncallused overqualified employees, anyway.  At least these jobs can keep a lot of people out of debt.

Another disturbing trend is the idea of judging people by the kind of work they sometimes do to “get by.” In recent years, there has been a trend to hold convenience store clerks and bartenders legally (and criminally) responsible for selling alcohol (or tobacco) to minors, even as individuals apart from their employers.  People who work in telemarketing are sometimes criticized personally because their ability to earn a living is predicated on disturbing the privacy of people in their homes, and the telemarketing industry has the reputation of hiring people who supposedly cannot get other jobs. Telemarketing jobs have been effectively used in “welfare to work” programs. Of course, this criticism arises because telemarketing has been so overused; if only charities used it for fund-raising and commercial entities could not, then there would be little or no public objection. Information technology workers feel slandered by the use of their craft for spam and virus-writing. Accountants feel vulnerable because of corporate accounting scandals. As the economy moves out of its slump, an important development may be the development of new paradigms for publicly visible personal accountability in the workplace. Will companies hire outside consultants to perform career audits of their associates? Will unions and guilds build new standards of accountability that exclude people from new opportunities, or will workers be allowed to try new career paths and given time to prove new modes of professionalism?

Staged Retirement

An article by Judy Greenwald, “Phased Retirement Begins to Catch On,” in Business Insurance, May 28, 2001 provides an interesting overview of the desire of many employers to help senior workers with a phased transition to other careers.  Unfortunately, federal laws often make it illegal for early retirees to collect defined benefit pensions (defined contribution works differently) while still working, particularly for the same employer.  Sen. Charles Grassly (R. Ia) has proposed a Phased Retirement Liberalization Act, which may not be popular with Democrats.  Phased retirement would bring up all kinds of questions about heath insurance, professional liability insurance, etc. and if too “liberal” might give seniors a opportunity to “lowball” younger workers (especially union members)while competing with them (an irrelevant observation perhaps for seniors who want to gravitate to a non-profit, issue-centered second career.

Severance and Layoffs

Although (except when bound by individual contracts with employees or perhaps when established by long-standing practice)  companies do not necessarily have to pay severance or a separation package (and can’t when they go broke), most stable and reputable companies offer severances for terminations not for cause (“no fault divorce”), and when offered it generally must comply with various state and federal laws (they are sometimes called unfunded welfare programs).  In some cases 60-day notices are required and severances are paid in liew of notices.  Typically severance after mergers is more generous than severance due to a “simple” downsizing (although care must be followed in making sure that the employee gets credit for all service with included original employers).  Some severances may require staying and performing to a certain level (measured numerically or collectively) through a release date, in an incentive-to-stay program.  Both hourly and salaried employees can receive severance, but in many unions hourly employees also obtain union benefits after layoff. One would expect that tax laws could be changed to encourage workers to set up their own tax-deferred “severance” accounts to use only if they get laid off—ponder the public policy implications. In the future we may see more employer concern about employee promotability (willingness to take on direct reports) and the idea that the employee (in some cases) uses his or her own public reputation for the benefit of the company.  Good sources on severance law are http://www.execlaw.com http://www.nolo.com/lawcenter/ency/index.cfm/catID/4BEF1F62-722F-435E-98AB18960A6EAB0E (from Nolo law books), and http://www.emergit.com/html/content_cur/survey/survey_04-30-2001.html. A source in print is Fred Steingold, The Employer’s Legal Handbook, from Nolo Press, 1997, p. 10/19. Still another source is Timothy B. Deal,  Cutting the Cord: A Small-business Layoff and Outplacement Guide” in Twin Cities Computer User, Jan. 2002. A recent article from an HR consulting firm BLR.com is at http://www.blr.com/hr/online/newsletter/index.cfm?article=630.  Wetfeet.com has an important article by Rachel Wong on employee severance rights at http://www.wetfeet.com/asp/article.asp?aid=493&atype=Transitions (you need to be a Wetfeet.com member).

  Sometimes companies negotiate specific severance packages when asking executives to leave. A desirable and modern trend with larger employers is for severance packages to offer pre-tax benefits (like health insurance) until they run out. It is customary and lawful practice in practically all states for most companies to require departing employees to sign “no sue,” “no disparage,” and reiterated confidentiality agreements (and sometimes non-compete clauses) in order to receive severance (similar to what insurance companies require before paying out liability claims). Severance packages may in fact be viewed by some employers as a practical strategy  to reduce litigation, but many bigger companies have developed the art of doing larger layoffs “remotely” by numbers or almost by lottery, to the point that they cannot easily be seen as a personal affront to individual employees who are affected or as the result of discrimination. Other techniques can include point systems based on peer reviews, legal disparate impact audits, forced ranking of skill sets (though involving employee debriefings these are not synonymous with conventional performance appraisals that are supposed to be based upon assigned duties) and any staff reduction method can pose some kind of theoretical legal risk, however well intended.  Although some non-profit religious organizations may base layoffs based on employee family responsibilities, it is clearly very risky for an employer to do this. Under “employment at will” it is always possible to terminate “for no reason” but not for an illegal reason (discrimination). In DADT Chapter 5, (note 130) we discussed alternatives to layoffs, such as reduced pay or piecework pay, and a few companies like Nucor and Southwest Airlines have been successful in avoiding them this way even in difficult times (as in 2001). In the long run, layoff-avoidance programs seem to be positively associated with shareholder value, but they may reduce the retirement income of older employees who may want to retire anyway.  A source on this is http://www.emergit.com/html/content_cur/profiles/08-13-2001_voluntary.jsp  Another discussion of the merits of layoff avoidance (particularly by pay cuts or freezes) is at http://www.blr.com/hr/online/newsletter/index.cfm?article=649.

Layoffs and severance are probably a significant and even necessary process in the economic growth cycle.  Layoffs reduce spending on economic activities that are no longer as profitable as they once were or for which public demand has run its course or for which greater economies of scale are possible for simpler repeatable services, where as severance puts money into the hands and control of individuals who, by having more time and less bureaucracy, may generate the new ideas, products and services and needed for future economic growth.  Many powerful companies, like Walt Disney, were started by individuals in difficult times after layoffs, and recessions actually provide a favorable cost environment for new business models to develop, depending on regulatory constraints.

Standard Work Week

(Oct 2001) Would reducing the standard work week to 34-37 hours help the now weak economy?  The basic  productivity in the workplace has increased (maybe not as much as in Belgium!) and increased personal time would help consumer spending, family life, and even reduce layoffs.  Why cannot American workers get the longer vacations of their European counterparts?  Time now to start asking these questions.  Possibly the workweek would sometimes be tied to whether one has dependents, another balancing to help families (but then it needs to be based on dependents, not legal marital status).

A Note about Unemployment Insurance (12-2002):

There was a lot of criticism when an apparently Scrooge-like Congress went home before break at the end of 2002 without renewing the federal supports 13-week extensions for unemployment insurance. There is some debate over whether UI is really a form of insurance that workers have paid for with legitimate moral claim to benefits, or whether it is a form of government welfare. It is a bit of both.  Many states have supplemental programs and will cut them back in the face of state budget deficits in a weak economy. Another feature of unemployment insurance is more subtle: many states allow beneficiaries to stretch out benefits (for 26 weeks worth) with part-time work for as long as 52 weeks and even to forward-date their account start dates past severance periods or other periods of income to their advantage. Some union and guild websites (such as SAG) baldly encourage members to take advantage of state-date manipulation for all it is worth. Again, some states, such as Minnesota, have the statutory legal right to withdraw this privilege and cut off beneficiaries at their discretion to save money (and it is unclear at this time whether they actually will). Social conservatives could make an argument like this: If there are low-pay undesirable jobs that go begging (like custodial jobs in nursing homes or even security screeners at airports), why not force unemployment recipients to take them before otherwise receiving public monies?  After all, a job loss always does represent, at some level, a failure of the individual to compete successfully, and the vulnerability to external world events and scandals only taints the individual’s claims of accomplishment. Shouldn’t more middle-class people pay their dues (as did Barbara Ehrenreich in Nickel and Dimed)? Even so, President Bush avoided such an unpopular lecture and now encourages Congress to restore the extensions as soon as it convenes in January 2003.

The issue comes up again as President Bush, in early 2004, proposes allowing a pseudo-amnesty for illegal aliens if they will work in jobs for three years that no American wants? Then why not expect laid off workers to take these jobs (at least part time) after the first period of unemployment runs out, before getting more benefits? Interim jobs can be a way back into the workforce and a gradual road back to prosperity, but the case has to be made publicly with employers.

Screening Tests (Personality)

There has occurred, in recent years, an increased interest on the part of employers in pre-screening candidates with true-false personality tests. These tests result in a profile or score that can be used to predict, given statistical data, success in certain kinds of work. It is also claimed that these tests can detect dishonesty, and they seem to be less objectionable than polygraphs or lie detectors (which generally may be used legally only for certain jobs requiring high security clearances or unusual responsibilities, or may be used sometimes when theft is suspected—but if they are suspect, why can they be used at all??). Companies that make up these tests (which are also used in outplacement counseling) say that they should not be used alone to eliminate candidates, but rather to suggest questions for followup in behavioral interviews. However some companies do use them to eliminate candidates in pre-screening, as for call-center jobs. The tests seem to focus on certain traits such as anxiety, excessive introversion, innate curiosity (or lack thereof) about how things work, and general level of sociability. They might be used to weed out candidates who would have trouble with job regimentation, attention to detail, or who might have personal motives that seem inappropriate for the kind of work, or who do not relate to people “as people” but only out of their own mental structures (such as persons with Aspberger’s Syndrome). For example, they might detect a covert journalist seeking a job in order to expose an industry or particular company (to prevent a “Food Lion” problem). But they may seem like mind-reading and invasion of psychological privacy to some candidates, like a kind of “asking.” So far, there seem to be no overt modern use of the tests to detect sexual orientation, although the Minnesota Multiphasic Personality Inventory (MMPI) was said, back in the 1950s, to detect homosexuals. Another popular test is Myers Briggs Type Indicator (MBTI, founded in the 1940s by Isabel briggs-Myers) tests for four axis-systems of personality (rather along the ideas of Paul Rosenfels):  Introverted/Extrovered (that is. Feminine or masculine), Intuitive/Sensing, Thinking/Feeling, Perceiving/Judging (all rather related to subjectivity and objectivity), Eilene Zimmerman provided The New York Times, Nov. 30, 2003, p. 8 with a study of personality tests, “Getting to Know You Is as Easy as A, B, C or D.” This article presented sample questions similar to those on the Wonderlic Persnnel Test, that is supposed to test for logical deduction and cognitive ability (many of the questions are like algebra “story problems” and some are syllogism questions. The passing scores for this test for many management job categories were surprisingly lenient, as the test seems quite easy for someone with a mathematics or computer background. There are other tests in use for such facilities as the ability to memorize, or recognize patterns in sequences of numbers or shapes, or even to listen carefully. The Fox Network offered a “national IQ test” that had questions similar to some of those on employment tests. Annie Murphy Paul has authored The Cult of Personality: How Personality Tests Are Leading Us to Miseducate Our Children, Mismanage Our  Companies, and Misunderstand Ourselves (New York: The Free Press, 2004), reviewed by Eric Wargo (“The Psyche on Paper: Understanding the risks, appeal of personality testing,” The Washington Times, Oct. 3, 2004, p. E8.

I took a personality test at home while applying for a call center job with AT&T on February 1, 2004 and my process was stopped “based on my responses” as I did not fit the acceptable profile. AT&T would not allow reapplication for six months. The TSA gives a similar personality test for security screener applicants as part of its assessment, but in my case I probably failed the test on recognizing contraband images.

One way to pass the personality tests (for many positions, like customer service) is to answer them honestly from the point of view of how the candidate expects to behave on the job only, and ignore personality preferences that would be expressed only outside of the job.

Also, many companies are using automated application schemes that collect applicant information in a way that gives an unfavorable impression from a candidate who has freelanced a lot, or held many short-term or part-time jobs. More employers are beginning to ask if the candidate has ever been fired from a job or resigned in lieu of firing. The federal government does this but offers plenty of space for explanations. A good question might be, whether the candidate has ever known of illegal activities on the job or followed illegal orders, or quit when he or she discovered illegal activity.

Background Checks

A Washington Post story by Amy Joyce, “Deeper Looks into the Past” (Aug. 22, 2003, page F1) discusses employee applicant background checks. Similarly, Ann Zimmerman and Kortney Stringer provide a similar account “As Background Checks Proliferate, Ex-Cons Face Job Lock,” The Wall Street Journal, Aug. 26. 2004, p. B1. For many jobs these might include local law enforcement fingerprint checks (which are becoming increasingly automated) or a check with a private database. Some checks have had errors that have misidentified persons and incorrectly reported convictions or outstanding arrest bench warrants. Persons have lost jobs without any legal recourse, which is surprising. It seems that there is much less protection in the legal system for persons from misinformation like this (just as with terrorist watch lists) than there is for incorrect credit report information. Part of the reason may be ideological (a well-paying job is not a “fundamental right”) and some may be just inattention from politicians. In a related story, a woman lost a job permanently in financial planning after an incorrect arrest for retail fraud at Banana Republic (http://www.doaskdotell.com/content/wchap5.htm note 127d). Another potential issue could come from assumed names, as when an individual owns a proprietorship that does not have to report results publicly. The individual would theoretically be required to disclose the assumed name, which, if there is little information available, could raise the impression of the possibility of money laundering. Disclosure is definitely required for fingerprint checks, and conceivably assumed names that are duplicated in various jurisdictions (states, cities, counties) among different owners could cause errors. The WSJ story also points out that the increasing use of background checks has a disparate impact on African American and perhaps Hispanic applicants.

The Privacy Rights Clearinghouse has an important fact sheet on employee background checks. This is at http://www.privacyrights.org/fs/fs16-bck.htm. It is important to note that when employers conduct background checks internally or outside of the credit report mechanism (with data-mining services like SecurTest, mentioned in the WSJ story above) they are not bound by the Fair Credit Reporting Act (FCRA). The fact sheet lists sources of information such as neighbor interviews, which in practice are rather infrequent (just like investigative consumer reports) drug tests and medical records that would seem in most cases to be covered by HIPAA (most pre-employment drug tests are supposed to be kept confidential and used only by that employer). See drug tests, see below.

Employers do have the right to insist that associates keep their credit reports clean, and monitor their own credit pro-actively and challenge inaccurate information (or even evidence of identity theft) through the channels established with the Fair Credit Reporting Act.

Up or Out

What is supposed to happen when someone “retires” are is marginalized in his profession (like information technology) and seeks and entry-level position in another kind of business? Should an employer welcome such a person only the employer believes that the retiree is serious about advancing in the new business and being fully committed to it? 

Drug tests

Many employers reserve the right to demand random drug testing. Today this is more common situation is a contingency in case there are behavior or performance problems, but drug testing is mandatory for most jobs where public safety is involved. In practice, the biggest problem is false-positive tests. Many legal substances can call false positives. Some antibiotics cause false positives for marijuana, and some over-thepcounter nose sprays and tablets cause false positives for amphetamines, especially with less expensive tests like EMIT. (The expensive gas chromatograph test may be more reliable.) Furthermore, sometimes second-hand smoke from other marijuana users in enclosed spaces can create a risk of a positive test for a few days. Marijuana is potentially detectable in the urine for a long time (up to 60 days), and newer hair tests (though not often used yet in employment—that have been used for life insurance!) can detect other drugs for a long time. (Imagine that some people might want to look like Smallville’s Lex Luthor to pass a test!) In many states, the burden of proof rests on the employee, although most employers would repeat a test. Why? Because due-process notions in our legal system don’t necessarily guarantee a “fundamental right” to a particular job. Employers could take the position that employees should avoid on- and off-duty behaviors that may create the “rebuttable presumption” of drug use (such as use of patent medicines or attendance at clubs where marijuana may be used). Furthermore, in some safety-sensitive jobs, use of even some legal medications (such as antihistamines) with drowsiness side effects is forbidden, at least within a certain number of hours of reporting to work.

Sometimes life insurance companies and law enforcement use newer hair follicle tests (the follicle can apparently be from any place but pubic hairs have been used; body hairs [anagen and telogen phases] may grow for less time than scalp hairs, which can last several years) to look for illicit drug use over the past several years. The federal government is talking about using this in employment (Department of Transportation or Homeland Security) and requiring private contractors to follow suit. Will these tests be quantitative or qualitative? They could complicate the secondhand exposure potential for a much longer time in a jobholder’s life. Legalization of drugs could lead to an employment arrangement where employers specify various legal substances that may not be used (even “second hand”) off duty, although employers would have to notify job applicants of their rules (substances, sensitivity and specificity of tests used) in detail (even on websites) before the job seekers apply.

Here is a reference on the false-positive problem. (Not necessarily and endorsement for any products offered.)

http://ipassedmydrugtest.com/drug_test_faq.asp#detect_time

Most manufacturers of drug screening tests claim that their tests have minimum cutoffs, below which exposure is presumed to be accidental and not an indication of use.  For some drugs, habitual users may take longer to clear detectable drugs from their systems. The second-hand smoke issue could intimidate holders of drug-sensitive jobs from visiting clubs where they believe drugs might be used, however generally drug testing companies claim that second hand exposure will cause a positive test only when it is prolonged and concentrated (such as being in a car with a user or sharing a room with a user). We are not sure of the accuracy of these claims from the companies. Comment to me at JBoushka@aol.com

Reference Checking

Most corporate and government employers now are unwilling to give out information about former employees except to verify the period of employment. Yet, there are a number of websites offering to do “dress rehearsal” reference checks and that claim many managers will violate employer policy and give bad references. Other websites claim that candidates must convince previous managers to “break the rules” to give out references or letters. This is all disturbing and points to the need for reform in the area of keeping track of professional track history. Certification fits into this problem.  Some sites suggest that employers needing reference checks provide candidates with waiver forms, although some former employers will not honor them. Here are some web references:

http://www.references-etc.com/employment_reference_checks.html

 

http://bullyinginstitute.org/home/twd/bb/legal/drc.html

 

http://hr.monster.com/articles/refchecktips/

 

School systems and other employers with sensitive positions sometimes require that candidates present reference letters that they have gathered on their own, despite the resistance of employers. The theory is that a candidate who is very secretive and not conventionally “socialized” to have connections with others may have difficulty getting such letters and might present an employment risk (such as when working with children).

For the practice of altering employee time records illegally see my review of the book by David Callahan, The Cheating Culture.Back to hppub home page

Email Jboushka@aol.com

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