The United States Department of Labor agrees that flexibility in work arrangements is important to maintaining a healthy society. But not all are convinced. In order to stay objective, the Department of Labor has to take into account the concerns accompanying the new developments. Let’s go through a few of them and explain why they should not be a cause for fear. It seems that the employee is automatically placed on the untrustworthy list simply for being flexible. The view is that “the worker will lose the protection of [...] laws and benefits and the employer's contribution to Social Security, but may accept the arrangement nonetheless because it gives him or her an opportunity for immediate and even illegitimate financial gains through underpayment of taxes.” This statement does not take into account that not every individual who ends up with a financial structure that does not require the same amount of tax is automatically doing so to illegitimately profit on the situation. There are many ways in which they will still contribute to the community outside of paying it directly into the system that will further spend that tax on more administrative expenses before the funds reach the actual support systems that the employee hopes to actually never have to rely on in the first place. One should also remember the numerous guides and programs for entrepreneurs that teach the proper conversion formula for finding the right rate to charge to stay on par with the previous salary so as not to unintentionally underpay. To start, you may want to look into an article written by Liz Ryan for Forbes titled “How To Convert Your Annual Salary To An Hourly Consulting Rate”. For the second concern, I would like to point out that "in sum, a small dose of fear keeps us alert and alive, but an overdose can leave us perpetually tense, emotionally closed, and paralyzed to the point of inaction." From the first glance, what does the employer seem to gain? The report names the following: “The employer will not have to make contributions to Social Security, unemployment insurance, workers' compensation, and health insurance, will save the administrative expense of withholding, and will be relieved of responsibility to the worker under labor and employment laws.” There is a reason why this statement is placed under “General Observations.” All of the reasons above are the exact overdose of fear that holds back an employee who could benefit from becoming a contractor. Whether the person fears losing the comfort of full-time employment or is discouraged by others not wanting to “ "graduate" to a more refined, and presumably more challenging, level of existence.”, the reality is that the contributions and the responsibility are just as much of a burden on the receiver as they are on the giver. Freeing both will only make this a win-win scenario. Many of us who have searched the employment market have seen for ourselves that good jobs are scarce. Why is this so? Does it not sound like we have allowed oligopolies to dominate by becoming dependant on the same things that create barriers to entry for companies that want to compromise with us and let us create our own conditions for what we would call a good job? Bypassing some of the safety nets does not necessarily mean that one or the other side or both are trying to “evade their legal obligations.” On the contrary, this is an opportunity to educate or provide tools for self-education for a budding innovator that would not be allowed to grow in a traditional arrangement and would be too busy to ever utilize the benefits that are paid for by the employer. How else will the company innovate its’ cumbersome system itself if it does not remove it and place it in a “petri dish” of a “professional who knows the territory”? Employment on a contract basis should not be looked at as the root of all evil. It has many health benefits that are not commonly discussed or presented when they should be. In 1994, the Department of Labor “heard testimony about the plight of people on the lowest rungs of the employment ladder. More workers now find themselves in contingent employment relationships than ever before.” Why, at the same time, hasn’t the simple fact that " ... flexibility is an important ingredient in prosperous organizations. (Anderson & King, 1993)." been presented? Besides the fact that contract basis relationships allow access to companies that are successful but at full capacity for regular employment, for those who have experienced burn out or have lost employees due to the same, an option to contract a worker can be a welcome solution. The reason why this option should be left on the table is due to the fact that "individuals who report that they have many different ways of responding to demands - coping strategies - at their disposal will do better in demanding situations." Those interested in further information, should look into the demand-control model developed by Karasek. Contingent employment relationships, such as a contractor relationship as opposed to a full-time employee status, are not always at fault for job related strain. The problems arise from the following: “Unfortunately, a common belief in management is that during financial crisis there is a need to take more control - and hence to decrease the decision latitude of employees - and at the same time increase psychological demands in order to increase the company's ability to compete. The arguments [...] speak against this common wisdom - in the long run, the ultimate result will be increasing health problems, and productivity will not increase." People in contingent relationships might not always realize that being employed full-time carries more demands and rules with it than a freelancing contract. Anyone who has received a company policy will know that. Decision latitude can be increased by giving the worker control over their own time and the way the job gets done, which is what a contractor status is perfect for. Although not all encompassing, I hope some of these points will help you see that many of the arguments presented as a cause for concern are in fact unfounded fears. Sources: https://www.dol.gov/_sec/media/repo... Conquering fear : living boldly in an uncertain world (2009); Kushner, Harold S. Fondren International Handbook of Work and Health Psychology / Edition 3; Cary L. Cooper, James C. Quick, Marc J. Schabracq For a PDF copy with better formatting, please send a direct message with your contact information.
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