Ch 12 Compensating the Flexible Workforce
Right to control: Employee or independent contractor?
-Employee if employer controls details of the work -Independent Contractor if worker controls the details of the work
How to test if independent contractors are employees? (2)
-common-law test -economic realities test
Employers Right to control criteria categories (3)
1. Behavioral 2. Financial 3. Type of relationships
Three legal tests to determine a workers status
1. Common-law test (used by IRS) 2. economic realities test 3. hybrid test
1. ERISA 2. NLRA 3. ADA 4. ADEA 5. PPACA
1. Employee retirement income security act 2. National labor relations act 3. americans with disabilities act 4. age discrimination in employment act 5. patient protection and affordable care act
Reasons to hire temporary/OC employees (5)
1. Fill in for core employees 2. Help ease high demand periods 3. help determine future employment needs 4. Assess employee for a core position 5. Don't receive company benefits
Requirements to participate in retirement plan (2)
1. Fulfilling the ERISA age requirement (21) 2. Completion of 1,000 hours of work in a 12 month period.
Leasing companies pension three requirements
1. Nonintegrated employer contribution rate of at least 10% 2. provide full and immediate participation in vesting 3. allow each employee to immediately participate in plan
Union concerns with Part Time employment
1. PT employment erodes labor standards; often denied fringe benefits, job security, and promo opportunities
Part-Time Benefit Issues (2)
1. Pay on hourly basis or a salary basis? 2. do companies offer benefits to PT workers?
Union Concerns with Temporary employment (2)
1. Temp employees can have little concern for improving company productivity 2. Union bargaining power becomes weak when companies demonstrate effectiveness w temp employees
part-time employees (2 kinds)
1. Voluntary 2. Involuntary
Cost control objectives in using contingent and flexible workers (2)
1. contingent employment allows for lower discretionary benefit costs and provides less generous amounts of benefits 2. well-trained contingent workers can reduce training costs
Reasons for employers increased reliance on contingent workers (3)
1. economic reasons 2. international competition 3. shift from manufacturing to a service economy
Companies are not responsible for what 4 things when it comes to independent contractors?
1. federal taxes 2. FLSA overtime/min wage 3. workers comp 4. ERISA, NLRA, ADA, ADEA, PPACA, Title VII of Civil Rights Act
Flexible work schedules include (3)`
1. flextime 2. compressed work weeks 3. telecommuting
Drawbacks of flextime (2)
1. increased overhead costs 2. coordination problems
Union concerns with flexible work schedules (2)
1. long days of compressed workweeks or flextime could endanger workers safety/health, even if worker chooses this 2. employee isolation, uncompensated overtime, & company monitoring in the home
Benefits of flextime (3)
1. lower tardiness and absenteeism 2. higher productivity 3. extended business hours
Types of Contingent Workers (4)
1. part-time employees 2. temp and on-call workers 3. leased employees 4. independent contractors, freelancers, consultants
Benefits to compressed workweek (3)
1. promote recruitment and retention 2. reduces commuting time 3. allows more family time
Telecommuting arrangements (5)
1. satellite work centers 2. neighborhood work centers 3. nomadic executive office 4. work off site or and/or on site 5. temporary or permanently
Companies hire temporary employees through three sources
1. temporary employment agencies 2. direct hire arrangements 3. on-call arrangements
Leaded employees cannot constitute more than ___% of the recipients "non highly compensated workforce"
20%
__% of part time workers have access to retirement benefits compared to __% of full time workers
37% part time, 74% full time
Common law test
Employment relationship exists if employer has right to control work process, as determined by evaluating totality of circumstances and specific factors.
independent contractors, freelancers, consultants
Establish working relationships with companies on their own. Possess specialized skills
Dual Employer common law doctrine
Establishes temporary workers rights to receive workers compensation
Advantages of Job Sharing
Flexibility, reduced costs, maintains productivity levels
Advantages /Disadvantages (2) to telecommuting
Adv- same as flextime Dis 1- Less direct employee interactions Dis 2- makes performance appraisals difficult
Part time workers (are/are not) protected under PPACA (heath insurance)
are not
Voluntary part time employee
chooses to work fewer than 35 hours
Following resignation, PT workers are eligible to...
Purchase health insurance under COBRA rules
Common law
developed by judges through court proceedings that decide individuals case
Economic Realities test
employment relationship exists if individual is economically dependent on a business for continued employment
Compressed workweek schedules
enable employees to preform their work in fewer days than a regular 5-day work week (4 10s)
Who is responsible for Leased workers discretionary benefits?
leasing and hiring companies
Leasing company is a _____ employer
legal
Flextime
set weekly not daily hours, May have core work hours
Leased employees are covered by _____
the Safe Harbor rules
Involuntary part time employee
works fewer than 35 hours per week because they are unable to find full-time employment
Strategic objectives in using contingent and flex workers
Contingent employment could bring an influx of new employees with new ideas and minimize group think
Telecommuting
Employees work at home or off-site (excluding the office).
Contingent Workers
Individuals who do not have an implicit or explicit contract for ongoing employment
Core employees
Individuals with long-term or indefinite relationships with employers
leased employees
Lease companies employ qualifed individuals and place them in client companies on a long-term basis.
Safe Harbor Rules
Leased employees must be covered by the leasing company's pension plan.
Economic Realities Test
Main focus- is the employee financially dependent -Significantly applied in the context of the Fair Labor Standards Act.
Do companies typically provide discretionary benefits for temporary employees?
No
FLSA min. wage and overtime pay provisions apply to temp. workers (T/F)
True
Job Sharing
Two or more PT employees preform one job.