Compensation: Chapter 12

Leased Employees

External organizations hire and train people to take care of specific organizational functions (e.g., food service). The leasing company is the employer for wages and legally required benefits. The primary company still retains some obligation for discretionary benefits and liability. Caution: Leased workers are not temporary employees! Leased workers are a case of dual-employment! Hire a lawyer!

Independent Contractors

Includes freelancing and consultants. External individuals who perform a specific job. Companies are not responsible for taxes, ERISA, FMLA, NLRA, Title VII, ADA, etc. CAUTION: It is not always clear that someone is an independent contractor.

Why be Part of the Flexible Workforce (7)

•Could only find part-time work •Family obligations (e.g., elder and child care). •Health limitations. •In school. •Retired. •Disability. •Infinite number of personal reasons.

Benefits for Part-Time Workers

-Retirement: Employers must allow part-time workers to participate in retirement plans after fulfilling the ERISA age and service requirements -Health Insurance: Part-time workers with fewer than 30 hours are not protected under PPACA (i.e., ACA/Obamacare). Part-time workers can purchase health insurance under the COBRA Rules (Consolidated Omnibus Budget Reconciliation Act).

2 Types of Part-Time Employees

-Voluntary: Works fewer than 35 hours because they want to. Likely to stay. -Involuntary: Works fewer than 35 hours per week because they are unable to find the full-time employment they really want. Likely to leave.

Temporary

Fill in for core employees or work during periods of high demand. Typically no discretionary benefits.

3 Types of Flexible Work Schedules

Flexible Work Schedules are Valuable Recruiting and Retention Tools that Allow for Greater Diversity -Flextime -Compressed Work Weeks -Telecommuting

4 Types of Flexible Workers

Job Sharing, Temporary, Leased Employees, and Independent Contractors

Benefits of a Flexible Workforce

Leased workers and independent contractors free up the organization to focus on other things more central to their strategic competencies. •Cheaper •Flexible •Can reduce legal risk.

Contingent Workers

Likely to work less than a year without an implicit or explicit expectation for ongoing employment. Could Be: •Part-time employees? •Temporary and on-call workers? •Leased employees? •Independent contractors, freelancers, consultants?

Flextime

Set of weekly or monthly hours. Combines 'core hours' where employees must be working as scheduled and 'banked hours' that can be worked on an alternate schedule. Performance appraisal should be outcome based.

Job Sharing

Two or more part-timers perform one job.

Are you an Employee or Independent Contractor?

Use Common Law Test or Economic Realities Test

Telecommuting

Work at home or off-site. Workers tend to become invisible and performance appraisals are difficult. Workers have difficulty remaining relevant.

Compressed Work Week

Workweek is fewer than five days. Make sure standard business hours aren't required

The Downside of Contingent Workers

•Determination of hours worked, paid vacation, and sick leave can be complicated. •Contingent workers are easily exploited with lower wages and benefits. •Part-time and short-term labor tends to erode labor standards. •Temporary employees tend to have little concern for improving company operations. •Long days of compressed workweeks are stressful and potentially dangerous. •When using leased workers or independent contractors, you give up considerable control. •If a legal case or the NLRB says your 'contractors' are actually 'employees', you are liable for all previous legally required benefits. •Hard to coordinate (no schedules or consistency)