Legal and policy implications of the flexible employment relationship

Journal of Labor Research

Volumn 17, Issue 4, 1996, Pages 583-593

  O'Brien Hylton, Maria ^a  

^a BOSTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0030501318     PISSN: 01953613     EISSN: None     Source Type: Journal    
DOI: 10.1007/bf02685801     Document Type: Article

References (41)

1. The terms "contingent employees" and "flexible employees" are used interchangeably throughout this paper.
2. Donald A Danner, "Part-Time Employment and Employees: Introduction" Journal of Labor Research 16 (Summer 1995), p. 237.
3. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
4. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
5. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
6. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
7. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
8. See, for example, Conference on the Growing Contingent Workforce: Flexibility at the Price of Fairness?: Hearing before the Subcommittee on Labor of the Senate Committee on Labor and Human Resources, 103d Congress, Second Session (1994); Washington and Lee Law Review 52 (1995), a symposium issue devoted to considerations of contingent employment; Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (1989); Bennett Harrison, "The Dark Side of Flexible Production," Technical Review, May/June 1994, p. 39; Karen Judd and Sandy M. Pope, "The New Job Squeeze," Ms., May/June 1994, p. 86; Laura McClure, "Working the Risk Shift," Progressive 58 (1994), p. 23.
9. See Hilary Stout, "Sharp Contrasts in the U.S. Health-Care Debate," Wall Street Journal Europe, September 13, 1995. Volume 20 of the Journal of Health Politics, Policy and Law is dedicated to the various attempts at health care reform. See Joseph White, "The Horses and the Jumps: Comments of the Health Care Reform Steeplechase," Journal of Health Politics, Policy and Law 20 (1995), p. 373; James A. Morone, "Nativism, Hollow Corporations, and Managed Competition: Why the Clinton Health Care Reform Failed," Journal of Health Politics, Policy and Law 20 (1995), p. 391; David W. Brady and Kara M. Buckley, "Health Care Reform in the 103d Congress: A Predictable Failure," Journal of Health Politics, Policy and Law 20 (1995), p. 447.
10. See Hilary Stout, "Sharp Contrasts in the U.S. Health-Care Debate," Wall Street Journal Europe, September 13, 1995. Volume 20 of the Journal of Health Politics, Policy and Law is dedicated to the various attempts at health care reform. See Joseph White, "The Horses and the Jumps: Comments of the Health Care Reform Steeplechase," Journal of Health Politics, Policy and Law 20 (1995), p. 373; James A. Morone, "Nativism, Hollow Corporations, and Managed Competition: Why the Clinton Health Care Reform Failed," Journal of Health Politics, Policy and Law 20 (1995), p. 391; David W. Brady and Kara M. Buckley, "Health Care Reform in the 103d Congress: A Predictable Failure," Journal of Health Politics, Policy and Law 20 (1995), p. 447.
11. See Hilary Stout, "Sharp Contrasts in the U.S. Health-Care Debate," Wall Street Journal Europe, September 13, 1995. Volume 20 of the Journal of Health Politics, Policy and Law is dedicated to the various attempts at health care reform. See Joseph White, "The Horses and the Jumps: Comments of the Health Care Reform Steeplechase," Journal of Health Politics, Policy and Law 20 (1995), p. 373; James A. Morone, "Nativism, Hollow Corporations, and Managed Competition: Why the Clinton Health Care Reform Failed," Journal of Health Politics, Policy and Law 20 (1995), p. 391; David W. Brady and Kara M. Buckley, "Health Care Reform in the 103d Congress: A Predictable Failure," Journal of Health Politics, Policy and Law 20 (1995), p. 447.
12. See Hilary Stout, "Sharp Contrasts in the U.S. Health-Care Debate," Wall Street Journal Europe, September 13, 1995. Volume 20 of the Journal of Health Politics, Policy and Law is dedicated to the various attempts at health care reform. See Joseph White, "The Horses and the Jumps: Comments of the Health Care Reform Steeplechase," Journal of Health Politics, Policy and Law 20 (1995), p. 373; James A. Morone, "Nativism, Hollow Corporations, and Managed Competition: Why the Clinton Health Care Reform Failed," Journal of Health Politics, Policy and Law 20 (1995), p. 391; David W. Brady and Kara M. Buckley, "Health Care Reform in the 103d Congress: A Predictable Failure," Journal of Health Politics, Policy and Law 20 (1995), p. 447.
13. See Hilary Stout, "Sharp Contrasts in the U.S. Health-Care Debate," Wall Street Journal Europe, September 13, 1995. Volume 20 of the Journal of Health Politics, Policy and Law is dedicated to the various attempts at health care reform. See Joseph White, "The Horses and the Jumps: Comments of the Health Care Reform Steeplechase," Journal of Health Politics, Policy and Law 20 (1995), p. 373; James A. Morone, "Nativism, Hollow Corporations, and Managed Competition: Why the Clinton Health Care Reform Failed," Journal of Health Politics, Policy and Law 20 (1995), p. 391; David W. Brady and Kara M. Buckley, "Health Care Reform in the 103d Congress: A Predictable Failure," Journal of Health Politics, Policy and Law 20 (1995), p. 447.
14. The Employee Benefits Research Institute estimates that 38.4 percent of total payroll was spent on employee benefits in 1990. EBRI Databook on Employee Benefits, (2d ed., 1992).
15. See Nancy R. Crow, "Design of Post-Retirement Health Benefits," American Law Institute, CA17 ALIABA 659, 662 (1995).
16. 26 U.S.C.A. § 3121(a)(7)(C) (1995).
17. Social Security is a mandatory, federally administered program designed in 1935 to provide financial reinforcement after retirement begins with a goal of minimizing old-age poverty. Generally, coverage is mandatory. The program is financed through a flat tax on employers, employees, and the self-employed. Wages above the "taxable wage base" (which goes up every year pursuant to 42 U.S.C.A. § 430) are excluded. Benefits are determined by age, length of employment, and average wages (adjusted every year for cost of living increases. See 42 U.S.C.A. §§ 413(d), 415 (1995)). The program is designed to provide low-income workers with a higher percentage of their previous income than high-income workers. The revised retirement age is 67 (but see 42 U.S.C.A. § 416: that only applies for those retiring after December 31, 2021, with a two-month staggered increase from the previous retirement age of 65 over 22 years). For many Americans, Social Security is the only source of post-retirement income.
18. For FICA purposes, an employer-employee relationship exists when "the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished." Treas. Reg. § 31.3121(d) - 1(c)(2) (1960). See Nationwide Mutual Insurance Co., v. Darden, 503 U.S. 318 (1992), Eckis v. Sea World Corp. 64 Cal.App.3d 1 (1977); Seattle Aerie No.1 v. Commissioner of Unemployment Compensation and Placement, 160 P.2d 614 (Wash. 1945) (en banc).
19. "The right to discharge is also an important factor indicating that the person possessing that right is an employer." I.R.S. Revised Rules 87-41, 1987-1 C.B. 296, 298. See also Parker v. National Corp. for Housing Partnerships, 619 F.Supp. 1061 (D.C. 1985); Fawcett v. Monongahela Ry. Co., 137 A.2d 2 768 (1958); Christy v. Petrus, 295 S.W.2d 122 (Mo. 1956) (en banc); Payne v. Railroad Co., 81 Tenn 507 (1884). 11 26 U.S.C.A. §§ 1401-3.
20. New York Labor Code requires claimants to have worked at least 20 weeks in the preceding 52-week period or 40 weeks in the preceding 104-week period. See New York Labor Code § 527.
21. "'Injury' . . . means only injury by accident arising out of and in the course of the employment. . . ." Ga ti34, ch9 art1 (4); "An employee . . . under this Act . . . shall have a cause of action by reason of any injury, disablement or death arising out of and in the course of his employment may . . . pursue . . . remedy. . . ." II, st ch820 s305(3); "'Compensable injury' means an injury that arises out of and in the course and scope of employment for which compensation is payable. . . ." "Course and scope of employment" means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer that is performed by an employee while engaged in or about the furtherance of affairs or business of the employer." Tx labor s401.011(10)(12).
22. The IRS defines a Common law employee in light of the employer-employee relationship: "Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to Discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work, to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor. An individual performing services as an independent contractor is not as to such services an employee under the usual common law rules. Individual such as physicians, lawyers, dentists, veterinarians, construction contractors, public stenographers, and auctioneers, engaged in the pursuit of an independent trade, business, or profession, in which they offer their services to the public, are independent contractors and not employees." See 26 C.F.R. §§ 31.3121(d)-1, 31.3231(b)-1, 31.3306(i)-1, 31.3401(c)-1. The Department of Labor defines employee as: (11)"employee" means: (i) A civil officer or employee in any branch of the Government of the United States, including an officer or employee of an instrumentality wholly owned by the United States; (ii) An individual rendering personal service to the United States similar to the service of a civil officer or employee of the United States, without pay or for nominal pay, when a statute authorizes the acceptance or use of the service, or authorizes payment of travel or other expenses of the individual; (iii) An individual, other than an independent contractor or an individual employed by an independent contractor, employed on the Menominee Indian Reservation in Wisconsin in operations conducted under a statute relating to tribal timber and logging operations on that reservation; (iv) An individual appointed to a position on the office staff of a former President under section 1(b) of the Act of August 25, 1958 (72 Stat. 838); (v) An individual selected pursuant to Chapter 121 to Title 28, United States Code, and serving as a petit or grand juror; (vi) Members of the Reserve Officers Training Corps; (vii) Civil Air Patrol Volunteers; (viii) Peace Corps Volunteers and volunteer leaders; (ix) Job Corps enrollees; (x) Youth Conservation Corps enrollees; (xi) Volunteers in Service to America; (xii) Members of the National Teachers Corps; (xiii) Members of the Neighborhood Youth Corps; (xiv) Student employeeS as defined in 5 U.S.C. 5351; (xv) EmployeeS of the Panama Canal Commission; (xvi) Certain employeeS of the Alaska Railroad; (xvii) Law enforcement officers not employeeS of the United States and Federal law enforcement officers who are pensioned or pensionable under sections 521-535 of Title 4, District of Columbia Code; (xviii) An individual covered under the provisions of section 105(e)(1) of Pub. L. 93-638 (Indian Self-Determination and Education Assistance Act of 1975): and (xix) Other persons performing service for the United States within the purview of the Act and all acts in amendment, substitution or extension thereof; (xx) But does not include: (A) A commissioned officer of the Regular Corps of the Public Health Service; (B) A commissioned officer of the Reserve Corps of the Public Health Service on active duty; (C) A commissioned officer of the National Oceanic and Atmospheric Administration. See 20 C.F.R. 10.5(a)(11).
23. It goes without saying that other less common benefits, such as dental insurance, child care, dependent care, vision care, and educational assistance, are nonmandatory.
24. See supra note 6.
25. In fact, in an article to be published in volume 52 of the Washington and Lee Law Review, Arne L. Kalleberg estimates that 49 percent and 46 percent of the part-time men and women are eligible for insurance, respectively. For full timers, in contrast, the corresponding figures are 89 percent and 83 percent. Arne L. Kalleberg "Part-Time Work and Workers in the United States: Correlates and Policy Issues," mimeo, March, 1995.
26. In fact, in an article to be published in volume 52 of the Washington and Lee Law Review, Arne L. Kalleberg estimates that 49 percent and 46 percent of the part-time men and women are eligible for insurance, respectively. For full timers, in contrast, the corresponding figures are 89 percent and 83 percent. Arne L. Kalleberg "Part-Time Work and Workers in the United States: Correlates and Policy Issues," mimeo, March, 1995.
27. Kenneth S. Abraham, "Efficiency and Fairness in Risk Insurance Classifications," Virginia Law Review 71 (1992): 403-51.
28. Kenneth H. Bacon, "The 1990's Economy: Impact of 'Baby Bust'," Wall Street Journal, April 14, 1986.
29. See Andrea Giampetro-Meyer, "Resurrecting Comparable Worth as a Remedy for Gender-Based Wager Discrimination," Southwestern University Law Review 23 (1994): 225-51. The author discusses the incentive for women to choose flexible employment positions.
30. Kalleberg, supra note 17 at 6-7.
31. Maria O'Brien Hylton, "The Case against Regulating the Market for Contingent Employment," Washington and Lee Law Review 52 (1995).
32. Part-Time and Temporary Worker Protection Act of 1993, H.R. 2188, 103d Cong., 1st Sess. § 4(b)(1)(B).
33. Kalleberg, supra note 17, at 22.
34. Title VII of the Civil Rights Act of 1964 prohibits gender discrimination. 42 U.S.C.A. § 2000e-2(1995).
35. The Americans with Disabilities Act prohibits discrimination on the basis of disability. 42 U.S.C.A. § 12101 et seq. (1995).
36. The Family and Medical Leave Act protests workers' jobs and maintains existing health benefits during a leave up to twelve weeks to accommodate birth, adoption, or care for a seriously ill family member. 29 U.S.C.A. § 2601 et seq. (1995).
37. The Age Discrimination in Employment Act prohibits discrimination against employees or applicants over 40. 29 U.S.C.A. 621 et seq. (1995).
38. The National Labor Relations Act of 1967 permits employees to bargain collectively. 20 U.S.C.A. § 151 et seq. (1995).
39. The Fair Labor Standards Act prohibits "oppressive child labor." 29 U.S.C.A. 201 et seq. (1995).
40. The ADA may prove to be an exception. At least one Federal Court of Appeals has adopted an expansive definition of "employer" under Title I of the ADA, designating a members-only trade association and a related trust set up to sponsor an ERISA welfare plan as employers for ADA purposes. No state or other federal law supported such a conclusion. See Carparts Distribution Center v. Automotive Wholesalers Ass., 37 F.3d 12(1st Cir. 1994).
41. The Employee Retirement Income Security Act of 1974 governs employee benefits plans that provide certain benefits. 29 U.S.C.A. 1001 et seq. (1995).