Future of Work: Policy Attempts to Lock in Yesterday's Workplace Escalate as CHROs Chart Future with Recruiting Software Initiative

August 29, 2018

Significant and challenging issues are emerging in the policy arena due to future of work trends while an Association initiative seeks to help employers in separating substance from noise in new hiring software programs.

Who is an employee? Courts and the states continue to embrace varying standards and interpretations of statutes determining employee status. The challenge for companies will be retaining the flexibility that independent contractor status ensures for both companies and workers, while also making sure the arrangement adequately meets both their needs.

  • The California Supreme Court moved away from a more flexible test that had been in use since 1989.  The decision in Dynamex adopts a three part “ABC” test for determining who is an independent contractor in the state, giving “employee” status to a far broader range of those individuals a business “engage[s], suffer[s] or permit[s]” to work.  Massachusetts and New Jersey have already adopted similar standards.

  • Gig companies were served subpoenas following the decision by San Francisco’s Attorney General, seeking documentation for each driver Uber and Lyft classifies as an independent contractor to prove that the worker “in fact” meets the three criteria set forth by the court.

  • Companies seek legislative relief: In June, gig economy companies and business associations asked Gov. Jerry Brown and state lawmakers to suspend or postpone the application of the ruling until the affected parties can work together to develop a worker classification test.  However, any relief from the Dynamex decision will not come from the state legislature before the next session begins in December 2018, if at all, and the California Labor Federation has pledged to resist efforts to suspend or reverse the decision.

  • Congressional Democrats are maneuvering to enshrine the ABC test into federal law with the so-called Workplace Democracy Act.  The bill has no chance of advancing in the current Republican-controlled Congress, but it signals Democrats' intentions should they take control of Congress and/or the White House in the 2020 elections.

  • What's ahead: The direction the law is taking at both the state and federal level is a government-imposed employment relationship deaf to the wishes of the parties.  Such a path will encumber U.S. economic competitiveness and the well-being of workers.

Employee and applicant data: The California Consumer Privacy Act, which arguably includes employment data as well, was signed into law a mere week after it was introduced, signaling what could be the start of a nationwide trend. 

  • Potential new disclosure requirement and employee rights: According to an analysis by Hogan Lovells, companies employing California residents may have to disclose to covered employees what data will be collected and the purposes for which it will be used.  However, the law does not require employee consent to collect the data.

  • Certain data would have to be handed over to employees if requested, as well as the categories of sources from which it was collected, the business purpose of its collection, and the categories of third parties with whom the data was shared.

  • Outlook: The bill was not clearly intended to cover employment data.  The California legislature, which did not have time to amend the bill before it was passed, is considering technical changes over the next few weeks and may consider potential amendments next year.  Whether other states—or a Democrat-controlled House—take up similar measures remains to be seen.

HR Policy Association's Recruiting Software Initiative (RSI) was developed to help members better understand the bevy of software tools that have the ability to improve the efficiencies and processes of the hiring and recruiting life-cycle, regardless of whether artificial intelligence is incorporated into the platform.

  • The RSI Review Board is comprised of talent acquisition leaders from 19 members companies.  Stephanie Lundquist, Executive Vice President and Chief Human Resources Officer at Target Corporation, chairs the effort.

  • The Review Board has examined responses from 32 software vendors that participated in a detailed request for information.

  • The RSI Database will launch at the Association’s Washington Policy Conference and make available to the membership all the information gathered to date.  Also included in the database are the Review Board’s notes pertaining to each vendor reviewed.

  • The RSI Review Board will issue a follow-up request to some vendors that didn’t originally participate, as well as several dozen new vendors that were identified during the RSI Review Board meeting.  The new information gathered along with the notes provided by the Review Board will be uploaded into the database.

  • If you have any questions about the RSI Database, the Review Board’s findings to date, or anything else related to the RSI, please contact Mike McGuiness at mzmcguiness@hrpolicy.org.

One fun thing—Senators bar tender of "beerbot" research funds: It's closing time for the Department of Defense's interest in suds-serving 'bots as the Senate unanimously approved Sen. Jeff Flake (R-AZ) and the late Sen. John McCain's (R-AZ) amendment to "prohibit the use of funds for the development of beerbots or other robot bartenders" in an appropriations bill.  “Did you hear the one about three robots that walk into a bar?” said Sen. Flake, flanked by pictures of futuristic robot bartenders, suppressing laughter.  “No, you haven’t.  It’s not a joke but rather a project paid for in part by the Department of Defense.”