Old Laws Hobble the New Economy Workplace

If we are living in the New Economy of the new millennium, why are U.S. labor laws mired in the New Deal of the 1930s? Employers are well aware that the anomalies exist and are increasing daily. It’s the legislators who are shirking the mind-boggling chore of modernization.

Two recent government rulings are illustrative: The National Labor Relations Board allowed employees of temporary-help agencies to organize into labor unions; the Department of Labor, although it eventually backed off, declared employers responsible for ensuring safe home offices for employees who work from home.

Many of the anomalies have their roots in the labor environment of Franklin D. Roosevelt’s presidency, but the workplace has changed a lot since then. Consider the following:

• ▪ Today supervisors often have less job security, longer hours and sometimes even lower pay than the employees they supervise. The latter have many protections from employment law; the supervisors essentially have none.
• ▪ Despite the evidence that employees benefit from improving their job-related skills, it is illegal for an employer to require that workers share the costs of training for their current jobs, even though employees may take their new skills to a different company soon after.
• ▪ Getting experience, even from unpaid work, is a good way for recent graduates and other entrants to the workforce to get ahead. But it is illegal to have anyone do volunteer or unpaid work that contributes value to the company.
• ▪ In the modern world, it is common for employees and teams to have some control over how they work. Ifindividuals direct their own work without supervision, the law says they are not eligible to join a union. But ifteams make decisions for themselves, they are technically behaving illegallyunless they are in a union.
• ▪ Employees who move to contractor status will find that their employee protections evaporate, even if the work they do is in every other way unchanged.
• ▪Education experts say that if students know employers are paying attention to school performance when hiring, they will be more motivated in the classroom. But because a school-performance criterion often has an adverse effect on groups protected by law against discrimination, employers are not permitted to ask about classroom performance unless they can show that the question relates to the requirements of the specific job for which the applicant is being considered.
• ▪ Employers increasingly let job-board Internet sites pre-screen applicants, but the employer, not the job board, will be held liable if the site’s screening criteria run afoul of the law.

Most U.S. employment law is based on two New Deal assumptions. The first is that employees fall into one of two groups: production workers or managers. The former do what they are told — which is often unpleasant and difficult. They need protection from managers who might take unfair advantage. Managers do not need protection, the reasoning goes, because theyare the organization. Codified in the Fair Labor Standards Act of 1946, that employment distinction is one that only the United States makes. The second assumption is that employment relationships are long-term and that the physical location of the company and the job remains constant. When that was the case, it made sense to expand the range of issues for which the employer was responsible.

Employment conditions have changed in almost every way but the way regulators see the issues. The old model is obsolete. It creates increasingly arbitrary divisions among employees —and, with each major piece of legislation defining employment differently, an interpretation quagmire.

Some traditional protections may no longer make sense forany employee; others may now be needed for managers, not just workers. If the U.S. Congress wanted to do something useful, it would hold hearings about the growing mismatch between employment law and the workplace. It would be a major undertaking and one that would require both rewriting specific protections and redefining the basic assumptions about what kinds of protection are possible and who should be protected. Until then, absurd anomalies are likely to appear on a daily basis.