A few years ago my son was hired for his first job out of college to work in the IT department of a large Boston company.
"Mom, there's a pool table in the lobby! They throw us paintball parties, pot luck parties and take us out for beer and pizza on Fridays after work!"
They also verbally promised him a trial period of 9 months, then full time employment with benefits. Excellent evaluations didn't help when he and most of the rest of the IT workers were outsourced 8 months later.
The Obama administration is pushing back on these corporate cheaters. Via the New York Times
Many workplace experts say a growing number of companies have maneuvered to cut costs by wrongly classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees. Moreover, the experts say, workers have become more reluctant to challenge such practices, given the tough job market.
SECOND UPDATE (getting weird here, folks): The suicide note has been deleted by the government, but can be found at The Smoking Gun.
Companies that mislabel employees as contractors or college students working in co-ops save big bucks with no obligation to pay Social Security, Medicare, or unemployment insurance.
The Chamber of Commerce is getting a case of the vapors about this terrible threat ~
"The goal of raising money is not a proper rationale for reclassifying who falls on what side of the line," said Randel K. Johnson, senior vice president with the United States Chamber of Commerce. "The laws are unclear in this area, and legitimate clarification is one thing. But if it’s just a way to justify enforcing very unclear laws against employers who can have a legitimate disagreement with the Labor Department or I.R.S., then we’re concerned."
Anybody here showing up at work every day, with a desk, phone and computer, but no benefits or job security?
More from the Times article:
The Obama administration plans to expand investigations by hiring 100 more enforcement personnel. The I.R.S. has begun auditing 6,000 companies to see whether they are in compliance with the law.....
"This denies many workers their basic rights and protections and means less revenues to the Treasury and a competitive advantage for employers who misclassify," said Jared Bernstein, who as executive director of Vice President Joseph R. Biden Jr.’s Middle Class Task Force has helped orchestrate the administration’s campaign against misclassification. "The last thing you want is to give a competitive advantage to employers who are breaking the rules."
A Harvard study found that 4.5 percent of Massachusetts workers were misclassified, while a Cornell study concluded that 10 percent of New York’s private-sector workers were.
Jim Ansara, Founder and Chairman of Shawmut, is a firm believer in Financial Bootstrapping
(a.k.a. outsourcing) - here's one of his more lame suggestions:
7. Outsource Administrative Functions
Consider outsourcing payroll, bookkeeping and other administrative services – This is a common practice. A good firm has the experience and can probably do the work much more easily and cheaply than you can. Outsourcing.org is a Web-based business directory providing information and free tools for suppliers and buyers of outsourcing services. Organizations such as the Sunday Project provide staff either to complete temporary projects or for general administrative support. Another strategy is to share this back office support with other nonprofit organizations. Click here to read about how one Minnesota organization, MACC Commonwealth, has followed this strategy.
Outsourcing computer-related work can be more economical than hiring someone full-time – Organizations like oDesk enable buyers of services to hire, manage and pay technology service providers from around the world (i.e. web developers, server administrators, database administrators, etc).
IT outsourcing is a $4 billion industry a year industry, and companies have sprung up to assist in the implementation, such as www.rentacoder.com and elance.com.. Outsourcing has become the predominant choice for major corporations in America.
Thank you, President Obama and Vice President Biden for working to keep America strong!