Chapter 8 EmployerEmployee Issues

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Chapter 8Employer/Employee Issues
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Chapter 8 - Objectives

• Define the term contingent workers and discuss
  why they are frequently employed in the IT
  industry.
• Outline key ethical issues associated with the
  use of contingent workers.
• Define whistle-blowing and the ethical issues
  associated with this action.
• Outline an effective whistle-blowing process.

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Non-Traditional Workers

• Huge numbers of baby boomers are retiring with
  fewer new workers to fill the pipeline.
• It is estimated that about 578,000 IT jobs will
  go unfilled in 2002 (US)
• 20,000 IT job shortfall in Canada (02)
• There is an increased demand for qualified
  workers to support information technology.

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Non-Traditional Workers

• A contingent workforce includes independent
  contractors individuals brought in through
  employment agencies on-call or day laborers, and
  workers on-site whose services are provided by a
  contract firm.
• A firm most often uses contingent workers when
  there are pronounced fluctuations in its staffing
  needs requiring technical experts on important
  projects, consultants in organizational
  restructuring, and workers in the design and
  installation of new information systems.

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Non-Traditional Workers

• There are two common ways for an organization to
  obtain contingent workers
• Temporary Help
• Employee leasing

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Non-Traditional Workers

• Employee leasing is the placement by an employer
  of its existing work force on the payroll of an
  employee leasing firm in an explicit
  co-employment relationship.
• A co-employment relationship is one where two
  employers have actual or potential legal rights
  and duties with respect to the same employees.

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Advantages of Using Contingent Workers

• Firms employing contingent workers usually do not
  pay for benefits (retirement, medical, vacation,
  etc.)
• Firms employing contingent workers may vary the
  number of employees at any time.
• May reduce training cost because many contingent
  workers are trained.

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Issues Raised By the Use of Contingent Workers

• Contingent workers may lack a strong relationship
  with the firm, which can result in low commitment
  and high turnover.
• The experience of the contingent worker is lost
  when the worker goes away at the projects
  completion.

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When To Use Contingent Workers

• Contingent workers may be the most flexible and
  cheapest way to get the job done, but it may
  raise ethical and legal issues.
• Employers should not use contingent workers in
  situations where they are likely to learn
  corporate processes and strategies that are key
  in a companys success.

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Contingent/Permanent Employee

• Factors that determine whether or not someone is
  an employee include
• Does the individual have the right to control the
  manner and means of accomplishing the desired
  results?
• Over how long of a period of time has the
  individual been employed?
• What is the amount of time the individual worked?

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Contingent/Permanent Employee

• Does the individual provide his/her own tools and
  equipment?
• Is the individual engaged in a distinct
  occupation?
• Is the method of payment by the hour or by the
  job?
• What is the degree of skill required to complete
  the job?
• Does the individual hire employees to help?

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H-1B and Canadian Work Permits

• The H-1B visa is a temporary working visa for
  people working in a specialty occupation that
  requires a bachelors degree or higher.
• The H-1B worker can work in the U.S. for up to
  six years.
• H-1B workers make up less than .1 of the U.S.
  workforce.
• Applications to work in Canada - Work Permits
• Canadian Government Site for Applications

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H-1B and Canadian Rules

• To apply for a H-1B visa, the individual must
  have a job offer from an employer who is willing
  to sponsor him/her.
• Two phase application process
• Labor Condition Attestation (Department of Labor)
  
• H-1B visa application
• Basically same process in Canada

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Using H-1B Workers Instead of United States
Workers

• Using H-1B workers lessens the incentive for US
  companies to educate and develop their own work
  force.
• This logic is OK in the short run, but not good
  in the long run because it does nothing to
  develop the core of permanent IT workers that the
  US needs to maintain a strong expanding economy.
• Same in Canada

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H-1B Workers

• There are potential problems with hiring H-1B
  workers
• Salary abuse Reports say that Indian programmers
  typically earn 30 less than their American
  peers.
• Not so in Canada no wage restriction
• Loss experience At the end of six years the
  worker may not receive their green card and the
  company may lose the workers experience.

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H-1B Workers

• Language barrier Managers may not fully
  understand how critical it is that the worker
  understand English.
• Cultural differences American workers must be
  aware and sensitive to differences in culture.
• Culture differences slightly easier to handle in
  Canada

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Outsourcing

• Outsourcing is another approach to meet staffing
  needs.
• With outsourcing, services are provided by an
  organization that has expertise in operating a
  specific client function.
• Offshore outsourcing is where the work is done by
  an organization using employees in a foreign
  country. Also new term NearShoring
• Some Pitfalls
• BrickRed An Outsourcing Company in India
• Call Center in India Blog

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Outsourcing

• With the shortage of application development
  staff, offshore outsourcing is popular.
• Lower salaries paid to offshore outsourced
  employees reduce overall project costs.

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Outsourcing

• Sending software development projects to another
  continent can increase project risks.
• Successful offshore outsourcing projects include
• Expertise in project technologies.
• Proficiency in the companys native spoken
  language.
• A large staff.
• A good telecommunications setup.
• Good on-site managers.

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Permanent IT Positions from Outside Canada

• Application process
• Job Offer
• Approval HRSDC
• CIC approval
• Facilitated Processing for Information Technology
  Workers
• Must fit one of following job descriptions

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Whistle-Blowing

• Whistle-blowing is a call to attract attention of
  others outside the employees company to a
  negligent, illegal, unethical, abusive, or
  dangerous act by the company that threatens the
  public interest.
• Actions taken by whistle-blowers may put them at
  great personal risk.

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Protection for Whistle-Blowers

• Whistle-blower protection laws allow employees to
  alert the proper authorities to employer actions
  that are unethical, illegal, unsafe, or violate
  specific public policies without concern for
  employer retribution.
• Unfortunately, there is no comprehensive federal
  law that protects all whistle-blowers.
• Canadian Whistle-Blower Laws

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Legal Overview USA - False Claims Act

• The False Claims Act (Lincoln Law) was enacted
  during the Civil War.
• The goal was to entice whistle-blowers to come
  forward by offering them a share of the money
  recovered.
• The Qui Tam provision allows a private citizen to
  file a suit in the name of the U.S. government
  charging fraud by government contractors who
  receive or use government funds.

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Other Whistle-Blower Statues USA

• There are laws that protect whistle-blowers in
  specific industries.
• Environmental workers
• Clean Air Act
• Toxic Substances Control Act
• Clean Water Act
• Safe Drinking Water Act
• Comprehensive Environmental Response,
  Compensation, and Liability Act
• Nuclear workers
• Energy Reorganization Act

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Canadian Whistle-Blowing Laws

• New Brunswick only province with direct whistle
  blowing legislation
• under their Employment Standards Act
• Ontario Environmental laws
• Other Legislation
• Canadian Environmental Protection Act
• Ontario's Occupational Health and Safety Act
• Canadian Labour Code
• Canadian Human Rights Act
• Canadian Competition Bureau immunity policy

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Private Sector Workers

• Under traditional state common law, in the
  absence of an employment contract, an employee
  can be terminated for any reason or no reason.
• Many states have laws that protect workers from
  being fired because of an employees
  participation in protected activities.
• Provinces also look at previous slide - Ontario
• Canadian Firms Policy (CAT)

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Dealing with a Whistle-Blowing Situation

• Assess the seriousness of the situation.
• Attempt to address the situation internally.
• Begin documentation.
• Consider escalation within the company.

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Dealing with a Whistle-Blowing Situation

• Assess implications of becoming a whistle-blower.
• Use experienced resources to develop an action
  plan.
• Execute the action plan.
• Live with the consequences.

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Summary

• A contingent workforce includes independent
  contractors individuals brought in through
  employment agencies on-call or day laborers, and
  workers on-site whose services are provided by a
  contract firm.
• The use of contingent workers enables the firm to
  meet its staffing needs more efficiently, lower
  its labor costs, and respond more quickly to
  changing market conditions.

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Summary

• Whistle-blowing is a call to attract attention of
  others to a negligent, illegal, unethical,
  abusive, or dangerous act that threatens the
  public interest.
• There are a number of laws to protect
  whistle-blowers.
• There are eight stages in an effective
  whistle-blowing process.

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Case 1 - Software to Assist in Managing
Contingent Workers

• Recruitment and Application Tracking Systems
  (RATS) software packages help manage and control
  the dollars spent on contingent workers.
• This software provides information that improves
  hiring decisions by enabling managers to better
  gauge consulting and service cost/quality.

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Case 2 - Sherron Watkins, Enron Whistle-Blower

• Sherron Watkins was the vice-president of
  corporate development at Enron. While analyzing
  sales of Enron assets, she was alarmed to find
  questionable accounting mechanisms being use to
  hide company debt. She thought it was also
  inappropriate for the company to use its stock to
  affects its income statement.