Ch 12 Compensating the Flexible Workforce

Contingent Workers

Employees who do not have implicit or explicit contract for ongoing employment. Part-time employees, temporary/on-call workers, leased employees, and independent contractors, free lancers, and consultants.

Core Employees

Have full time jobs or part time jobs, and they generally plan long-term or indefinite relationships with their employees.

Voluntary Part-time employee

Chooses to work fewer hours than 35 per regularly scheduled work week.

Involuntary part-time employees

Work fewer hours than 35 per week because they are unable to find full-time employment.

Job sharing

two or more part time employees perform a single full-time job.

temporary employment agency

The most common source where companies hire temporary workers

Direct hire arrangements

directly hired temp employees only work less than a year

Lease companies

employ qualified individuals and place them in client companies on a long-term basis

Independent Contractors, freelancers, and contractors

establish working relationships with companies on their own rather than through temp employment agencies or lease companies

common law test

Employment relationships exists if employer has right to control work process, as determined by evaluating totality of the circumstances and specific factors

economic test

Employment relationship exists if individual is economically dependent on a business for continued empolyment

Hybrid test

Employment relationship is evaluated under both common-law and economic reality test factor, with a focus on who has the right to control the means and manner of worker's performance.

economic structure, international competition, and shift from manufacturing to a service economy

Three structural changes in the U.S economy that have contributed to the ruse of contingent employment

37%

Retirement benefits for part-time employees compared to 74% for full-time

FLSA

Minimum wage and overtime pay provisions apply to temp employees

Benefits for temp employees

Companies do not provide discretionary benefits

Dual employer common law doctrine

establishes temp workers' rights to receive workers' compensation

Safe harbor rules

-Leased employees covered by leasing company's pension plan

-Nonintegrated employer contribution rate of 10%

-Full and immediate participation in vesting

-Leased employees less than 20% of non highly paid workforce

Common law

developed by judges through court proceedings that decide individual cases

right to control

whether the employer has this right based on IRC criteria

economic realities

test is most significantly applied in context of the Fair Labor Standards Act. Whether employees are financially dependent on the employer

Flexible schedules

allow employees to modify their work schedules within specified limits set by the employer

Core hours

All workers must be present during certain workday hours when business activity is regularly high

Banking hours

flexible program that enables employees to vary the number of work hours daily as long as they maintain the regular number of work hours on a weekly basis.

Flextime schedule advantges

1. lead to less tardiness and absenteeism 2. lead to higher work productivity 3. creating longer business hours and better service.

Flextime schedule limitations

overhead costs and coordination problems

Compressed workweek schedules

enable employees to perform their work in fewer days than a regular 5-day workweek

telecommuting

an alternative work arrangement in which employee at home or at some other location besides the office, minimize commute time and expense, no direct contact with employer

working condition fringe benefits

telecommuter employees who are provided with office equipment for telecommuting purposes are not taxed when they are provided to the employee within telecommuting relationship

Groupthink

occurs when all members agree on mistaken solutions because they all share the mindset and view issues through the lens of conformity