- Contingent Workforce Strategies 3.0 - http://cwstrategies.staffingindustry.com -

The true ramifications of the evolving legal landscape

Key capabilities for effective and competitive contingent workforce programs come in all forms and categories. Whether it’s operating with a clear and effective program mission statement [1] or automating the reporting and visibility of the program’s performance, certain capability levels provide the fundamentals that facilitate desired performance levels. One of those capabilities is the ability to track the evolution of laws, regulations and court judgments that affect the risk mitigation strategies of CW programs, and more importantly, the organizations they serve.

The regulatory environment for CW programs is fast-moving. And even macro-economic and political inclinations of administrations at federal, state and local levels can affect the nature and enforcement structure of that regulatory environment. Two current examples: salary history and VIPKid.

Salary. Inquiring about salary history during the hiring process, a traditional process step, is on the way out for full-time employment processes, banned under new laws emerging at state and local governmental jurisdictions. Proponents of these new laws and regulations claim that unfairness and discrimination are created and perpetuated by this step, that it produces lower salaries, for women and people of color in particular. It is not known how these new changes will affect the CW regulatory environment, but some negative reactions are taking place in the marketplace. For example, a few staffing providers are limiting visibility to pay rates, claiming that this will create an unwanted view of salary history. This of course creates a major road block for programs striving to understand and manage behavior and cost effectiveness in the interior of a bill rate.

VIPKid. You’ve probably heard of Uber and GrubHub and their legal contractor-versus-employee battles, but have you heard of VIPkid? VIPKid is a teacher’s portal that is experiencing popularity in the Chinese online education marketplace by offering an American elementary education experience to Chinese students. The company hires qualified teachers with experience in the North American classrooms to give 25-minute, one-on-one educational support. VIPKid is among a number of gig-economy companies embroiled in the contractor-versus-employee lawsuits. To say the least, the legal codification of independent contractor management practices is evolving right in plain sight and needs to be tracked and analyzed on an ongoing basis so their ramifications are understood.

Lacking clear understanding of legal developments’ true effect on workforce solutions ecosystem can lead to policies that are more hindrance than helpful. For example, past co-employment court case judgements led to some noncompetitive program management practices that are still in place in many organizations, to the direct detriment of the effective and competitive engagement of contingent workforce resources. As noted above, some behavior is already occurring in the marketplace concerning salary history regulatory restrictions, which in time might prove totally unnecessary, narrow-mindedly misguided, and serve to hinder programs’ ability to be competitive.

Thus, it is important for programs to be able to track and understand the ramifications of legal developments in the ecosystem. There are a number of sources in the marketplace to aid in this endeavor. They range from formal government sources, to law firms that specialize in employment law practice, to associations that represent staffing industry best practices in lobbying efforts. Even some supply chain providers are stepping up their information services on regulatory marketplace visibility/expertise.

With varying levels of efforts and cost-effectiveness, a CW program can create a capability that should involve both internal and external resources to track the evolution of today’s fast-moving regulatory environment. Armed with that up-to-date insight, the program must then evolve its risk mitigation strategies to protect itself and the organization it operates. But additionally, it must balance that protection with its competitive market position to ensure it can attract and successfully engage quality CW talent.