US labour board takes ac­tion on shar­ing econ­omy jobs

The Pak Banker - - COMPANIES/BOSS -

A US labour board voted on Thurs­day to re­de­fine the em­ployee-em­ployer re­la­tion­ship, grant­ing new bar­gain­ing pow­ers to work­ers in an econ­omy in­creas­ingly re­liant on sub­con­trac­tors, fran­chisees and tem­po­rary staffing agen­cies.

The de­ci­sion by the Na­tional Labour Re­la­tions Board could up­end the tra­di­tional arm's-length re­la­tion­ship that has pre­vailed be­tween cor­po­rate ti­tans such as McDon­ald's and its neigh­bour­hood fran­chises. And it comes as con­cerns are grow­ing about a gen­er­a­tion of new in­ter­net-driven busi­ness such as Uber and Lyft that de­pend heav­ily on in­de­pen­dent con­trac­tors that of­ten do not have the ben­e­fits and pro­tec­tions of full-time em­ploy­ees.

In a case that drew in­tense lob­by­ing by both busi­ness and union groups, Demo­cratic ap­pointees on the panel split 3-2 with Repub­li­cans to adopt a more ex­pan­sive def­i­ni­tion of what it means to be a "joint em­ployer". The de­ci­sion makes it more dif­fi­cult for com­pa­nies to avoid re­spon­si­bil­ity for the treat­ment of em­ploy­ees by out­sourc­ing work to oth­ers.

In do­ing so, the panel sided with labour ad­vo­cates and aca­demics who have de­scribed an in­creas­ingly fis­sured econ­omy, in which whole in­dus­tries have been built on busi­ness mod­els that of­fer work­ers few of the pro­tec­tions of a tra­di­tional em­ployer re­la­tion­ship. "With more than 2.87 mil­lion of the na­tion's work­ers em­ployed through tem­po­rary agen­cies in Au­gust 2014, the board held that its pre­vi­ous joint em­ployer stan­dard has failed to keep pace with changes in the work­place and eco­nomic cir­cum­stances," the board said.

The board's ac­tion is just the latest to tackle the trend. The Depart­ment of Labour has cracked down on em­ploy­ers who mis­clas­sify work­ers as in­de­pen­dent con­trac­tors, and the Oc­cu­pa­tional Safety and Health Ad­min­is­tra­tion has di­rected in­spec­tors to con­sider whether prin­ci­pal em­ploy­ers might be at fault for the safety vi­o­la­tions of their sub­con­trac­tors. Courts, mean­while, have been scru­ti­n­is­ing com­pa­nies like FedEx and Uber for their use of con­trac­tors. Em­ploy­ers are push­ing back. Busi­nesses that might be sub­ject to the new joint em­ployer def­i­ni­tion have warned that it could un­der­mine es­tab­lished busi­ness prac­tices that have kept the US econ­omy com­pet­i­tive by hold­ing down labour costs.

As a re­sult of the de­ci­sion, some busi­nesses may try to legally dis­tance them­selves from their part­ners to avoid joint em­ployer sta­tus, but oth­ers may find they need to ex­ert more con­trol. Cor­po­ra­tions are "try­ing to have it both ways - have the ben­e­fits of the con­trol, and not the dis­ad­van­tages", said Ti­mothy Glynn, a pro­fes­sor at Se­ton Hall Univer­sity School of Law.

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