Friday, February 16, 2018

NLRB Seeking Input on Misclassification Unfair Labor Practice

NLRBYesterday, the NLRB announced that it is seeking input on whether an employer's misclassification of employees as independent contractors should be a unfair labor practice under Section 8(a)(1). In the case at issue, Velox Express, an ALJ found such a violation. This comes on the heels of some recent NLRB decisions finding a ULP in misclassification cases, as well as the General Counsel's release of a Division of Advice memorandum along the same lines (indicating more of a focus on that issue). Unsurprisingly, the new Board looks to be reigning in this type of ULP, if not eliminating it altogether.  The question presented in the Velox call for briefs:

Under what circumstances, if any, should the Board deem an employer’s act of misclassifying statutory employees as independent contractors a violation of Section 8(a)(1) of the Act?

Stay tuned . . . .

-Jeff Hirsch

 

February 16, 2018 in Labor and Employment News, Labor Law | Permalink | Comments (0)

Grad Students Abandoning Election Victories

Inside Higher Ed is reporting on three different graduate student election certification efforts being abandoned in recent days. Following the NLRB's 2016 Columbia University decision, there was a surge of organizing activity for private-school grad students. However, with the new Trump Board, the fear among unions and organizers is that Columbia will soon be overturned. As a result, unions are abandoning the formal NLRB representation process, hoping to gain voluntary recognition from the universities. Thus, last week, unions working with grad students at Boston College, University of Chicago, and Yale University withdrew election petitions they had filed with the NLRB. Just to underscore the significance of these moves, note that the unions had already won elections at all three schools. But given that the schools were challenging those elections, the unions clearly felt that the better strategy was to stand down and attempt to gain voluntary recognition. The chances of voluntary recognition at these three schools appear to be low--it's unclear why the schools would reverse their strong opposition to their grad students' organization efforts--but it's something that has worked at other schools. As the article noted: 

William Herbert, executive director of the National Center for the Study of Collective Bargaining in Higher Education and the Professions at Hunter College of the City University of New York, said it appeared graduate students will rely on the already demonstrated showing of majority union support. “Keep in mind that graduate student unions were voluntarily recognized at NYU and the University of Connecticut,” he said, the latter case involving a public institution subject to state labor laws.

-Jeff Hirsch

February 16, 2018 in Labor and Employment News, Labor Law | Permalink | Comments (0)

Thursday, February 15, 2018

Secunda on the Right to Disconnect

SecundaPaul Secunda (Marquette) has just posted on SSRN his article (8 Notre Dame J. Int'l & Comparative L. (2018)) The Employee Right to Disconnect. Here's the abstract:

U.S. workers are increasingly finding it difficult to escape from work. Through their smartphones, email, and social media, work tethers them to their workstations well after the work day has ended. Whether at home or in transit, employers are asking or requiring employees to complete assignments, tasks, and projects outside of working hours. This practice has a profound detrimental impact on employee privacy and autonomy, safety and health, productivity and compensation, and rest and leisure. France and Germany have responded to this emerging workplace issue by taking different legal approaches to providing their employees a right to disconnect from the workplace. Although both the French legislative and German corporate self-regulation models have their advantages, this paper puts forth a hybrid approach using existing U.S. safety and health law under OSHA to respond to this employee disconnection problem. Initially under the general duty of clause of OSHA, and then under OSHA permanent standards and variances, this article provides a uniquely American approach to establishing an employee right to disconnect from work.

rb

February 15, 2018 in Wage & Hour, Worklife Issues, Workplace Safety | Permalink | Comments (0)

Sunday, February 11, 2018

$10,000 Prize for Best Employee Benefits Simplification Proposal

Loga-acebcThe American College of Employee Benefits Counsel is sponsoring a competition, with a $10,000 prize, for the best original legislative proposal to simplify employee benefits law. The College plans to sponsor the competition annually for at least five years. The initial award will be presented at the College’s Annual Meeting and Induction Dinner in September 2018. To be eligible for the 2018 award, a proposal must satisfy the rules linked below, and be submitted on or before April 1, 2018. Criteria for judging submissions include the degree of simplification, prospects for enactment, and originality. Submissions must enhance, or at least have no adverse effect on, any material rights of employees and plan participants.


The award winner will be selected each year by the ACEBC Simplification Award Committee. The Award Committee’s selection of a winner will be subject to the approval of the ACEBC’s Board of Governors. Detailed rules, eligibility and selection criteria, and submissions procedures are available here. A list of FAQs is posted here, and may be updated during the competition as the Committee deems appropriate.

rb

February 11, 2018 in Pension and Benefits | Permalink | Comments (0)

Friday, February 9, 2018

Reminder: COSELL XIII at South Carolina on September 27-29, 2018!

SC Law School

All, as you begin to plan/budget your travel and conferences for next year, I wanted to remind everyone that the Thirteenth Annual Colloquium On Scholarship in Employment and Labor Law (COSELL) will be held at the University of South Carolina School of Law in Columbia, South Carolina.  We are celebrating our move into a completely new legal facility, and look forward to you joining us for the conference on September 27th-September 29th, 2018.  Information on registering and participating in the conference will follow in the next few weeks.  Some general information on travel/airports is available here, and information on the conference hotel (The Inn at USC) is available here.

More details to follow very soon, we look forward to seeing everyone in South Carolina next fall!

Joe Seiner

February 9, 2018 | Permalink | Comments (0)

Friday, February 2, 2018

From Facebook to Monster – Age Discrimination in Social Media Job Ads.

New ImageThere’s been considerable fuss recently about age-based targeting of social media job advertisement, in a variety of media, including the New York Times and NBC. The short version of the story is that the ads were shown to a younger demographic, thus giving such workers a considerable leg up in the job hunt, maybe even a monopoly on many openings.

It’s not at all clear that the practice is illegal under current federal law.  While the ADEA does reach advertisements, the language of § 623(e) bars only expressing an age preference, and these ads do not do that. Indeed, they don’t need to because older workers never see the ads in the first place.  Maybe Facebook can be viewed as an “employment agency,” as one suit argues, but it’s still somewhat of a textualist stretch to reach this particular kind of conduct. And maybe state laws, especially those with aiding and abetting prohibitions, fill the gap although many seem to track the ADEA’s phrasing.

The reality is that current laws did not envision a world in which employers could market openings to niche groups of potential employees, and none of the current legal paradigms is a very good fit for the problem. And that’s true even if we all agree that such targeting is contrary to the goals of the ADEA because people outside of the specified age range will often be effectively shut out from participation in the recruitment and hiring process.

Maybe public outcry will address the concerns? The Times reports that, while Google does not prevent advertisers form displaying ads based on the user’s age, LinkdIn has changed its system to prevent such targeting. And one could imagine an amendment to the ADEA that proscribed that conduct. Senators Collins (R) and Casey (D), seem concerned.

But would either a shift by social media or a statutory amendment be effective?  The ads in question were tailored to an age demographic, and prohibiting that precise conduct might be easy.  But would it solve the problem or would employers simply shift to other methods of targeting desired workers? Social media outlets allow advertisers to aim at other groups, say “recent college graduates” or maybe “active Facebook users.”  Such targeting might be a pretty good proxy for age while avoiding a formal age classification.

How would we even think about that? Disparate treatment because a particular employer shifted from a facially discriminatory policy to a proxy? But what about an employer who never used age targeting but starts looking for recent grads? Or disparate impact because the target group is facially neutral even though heavily youth-centric? And if we go the latter route, might the ads be justified by a reasonable factor other than age, given that likely applicants for entry level jobs are probably younger and targeted ads may be more cost-effective? Of course, the latter possibility depends on how Facebook, Google, or LinkedIn charge advertisers – a per click rate might obviate cost concerns.

All in all, quite a challenge for the antidiscrimination project.

Hat tip to Charles Mueller Seton Hall ’18 for his research assistance.

CAS

February 2, 2018 in Employment Discrimination | Permalink | Comments (0)

Wednesday, January 31, 2018

Feminist Judgments: Employment Discrimination Opinions Rewritten

Just in from Friends-of-Blog Ann McGinley (UNLV) and Nicole Porter (Toledo), the information to apply can be Downloaded Here:

 

Dear Colleagues,

 

Ann McGinley and I (Nicole Porter) invite you to apply to our Revised Call for Authors for an exciting new project we are working on: Feminist Judgments: Employment Discrimination Opinions Rewritten. Details about the project and how to apply to be one of the authors of a rewritten opinion or commentary are all in the Revised Call for Authors.  Please distribute to anyone who might be interested. And if you have already applied to us, please note that there is no need to do so again. 

 

Thank you!

Nicole Porter

January 31, 2018 in Scholarship | Permalink | Comments (0)

Tuesday, January 30, 2018

Challenge to Columbia Graduate Student Case

ColumbiaAs will be a surprise to exactly no one, we're seeing a challenge to the NLRB's Columbia decision concluding that grad students can be classified as employees under the NLRA. This time it's a challenge in the actual Columbia case. Following the union's 1602-623 win, the university is pursing a challenge via a technical 8(a)(5). That's the process for appealing most representation decisions of the NLRB. The employer refuses to bargain with the union--typically a violation of Section 8(a)(5)--and uses the proceedings of that unfair labor practice case to challenge the underlying representation action. In this case, the grad students' status as employees eligible to union under the NLRA.

More to come on this one, so stay tuned.

-Jeff Hirsch

 

 

January 30, 2018 in Labor Law | Permalink | Comments (0)

Monday, January 29, 2018

Bornstein on Equal Pay

Bornstein-Photo-June-2016-Web

In an incredibly timely piece recently posted on SSRN, Equal Work, Professor Stephanie Bornstein (Florida) does a superb job of evaluating and critiquing our equal pay laws.  Over at Jotwell, Professor Bornstein's piece is reviewed in much greater detail, highlighting the importance of her work.  I highly recommend this piece if you are doing any research in this area.  Professor Bornstein is quickly becoming one of the go-to experts in this area.

- Joe Seiner

January 29, 2018 | Permalink | Comments (1)

Sunday, January 28, 2018

Recent Developments in Title VII Protection for Sexual Orientation

JackThis guest post is courtesy of Jack Harrison (NKU-Chase):

On Thursday, January 25, 2018, the United States Court of Appeals for the First Circuit upheld a 2016 jury verdict of more than $700,000, plus $184,000 in legal fees, in a Title VII case involving Lori Franchina, a lesbian firefighter for the City of Providence, Rhode Island. This case is important because it represents yet another decision by one of the Courts of Appeals calling into question precedents in the circuit holding that sexual orientation discrimination is not prohibited by Title VII’s prohibition of discrimination “because of sex.” While Franchina was decided on a sex-plus theory, rather than a sexual orientation theory, the “plus” in the case was Franchina’s sexual orientation.

The Court of Appeals described the horrendous treatment that Franchina had endured in the workplace as follows:

‘Cunt,’ ‘bitch,’ ‘lesbo’: all are but a smattering of the vile verbal assaults the plaintiff in this gender discrimination case, Lori Franchina, a former lieutenant firefighter, was regularly subjected to by members of the Providence Fire Department (‘the Department’). She was also spit on, shoved, and — in one particularly horrifying incident — had the blood and brain matter of a suicide-attempt victim flung at her by a member of her own team.

The First Circuit flatly rejected the city’s argument “that under a sex-plus theory, plaintiffs are required to identify a corresponding sub-class of the opposite gender and show that the corresponding class was not subject to similar harassment or discrimination.” In rejecting this argument, the First Circuit seemed to embrace the broader comparator analysis adopted by the Seventh Circuit in its decision in Hively, finding that sexual orientation discrimination was, indeed, discrimination “because of sex” prohibited by Title VII. The First Circuit also indicated that nothing in its prior decision addressing sexual orientation discrimination, Higgins v. New Balance Athletic Shoe Inc., “forecloses a plaintiff in our Circuit from bringing sex-plus claims under Title VII where, in addition to the sex-based charge, the ‘plus’ factor is the plaintiff's status as a gay or lesbian individual.” The discussion by the court of this precedent appears to call into question the court’s commitment to the position held in Higgins. Such questioning is certainly consistent with language used by other Courts of Appeals in decisions over the last year, including decisions by the Seventh, Eleventh, and Second Circuits, addressing the reach of Title VII in the sexual orientation discrimination context.

Currently, the en banc United States Court of Appeals for the Second Circuit is considering Zarda v. Altitude Express, a case that, like Hively, squarely asks the question of whether Title VII’s prohibition against discrimination “because of sex” includes discrimination based on sexual orientation. Oral argument was held in Zarda on September 26, 2017. While scheduled for only one hour, the arguments actually lasted for almost two hours. The questions asked and the tone of the oral argument would suggest that the Second Circuit is likely to follow the lead of the Seventh Circuit in Hively, concluding that the prohibition against discrimination “because of sex” found in Title VII includes a prohibition against discrimination based on sexual orientation. The Supreme Court recently rejected a petition for certiorari in a case from the Eleventh Circuit that raised this question, but with a decision in Zarda expected any day, the Supreme Court may ultimately have to address this issue.

rb

January 28, 2018 in Employment Discrimination, Labor and Employment News, Workplace Trends | Permalink | Comments (0)

Labor Law & Practice in SE Asia

TrangAs many of you know, I spent the better part of winter break in Southeast Asia, teaching or conferencing in Viet Nam, Myanmar, and Cambodia. If any of you have an interest in visiting the area or contacting folks in the labor/academic community there, let me know and I'll be happy to help make connections.

Meanwhile, I've just posted on SSRN an article I've co-authored with Trần Thị Kiều Trang (Hanoi Law University) On the Precipice: Prospects for Free Labor Unions in Vietnam (forthcoming San Diego Int'l L.J.). Here's the abstract:

Viet Nam is rapidly transitioning economically, in large part due to the pro-trade policies that have attracted international capital. A necessary component for Viet Nam to further integrate into the world economy is to develop a system of industrial relations that will ensure industrial stability and reassure international manufacturers that there is no risk of embarrassment resulting from revelations of brutal or unsafe working conditions. Positive signs for rapid labor reform were visible as recently as early 2016 with the Trans-Pacific Partnership (“TPP”), a trade agreement intended to integrate trade among twelve countries (including Viet Nam), which would have set international benchmarks and a fixed deadline for labor reform.

Notwithstanding the withdrawal of the U.S. from TPP negotiations, labor reform in Viet Nam continues, as there is currently a vigorous debate within the country over which direction reform should take. This article describes the existing labor regime in Viet Nam, and how the ILO and the TPP jump-started the most recent wave of labor reform. It then analyzes Vietnamese labor law, specifically as compared to ILO norms, and evaluates current proposals for reform.

rb

January 28, 2018 in International & Comparative L.E.L., Scholarship | Permalink | Comments (0)

Sunday, January 21, 2018

Employee Under Right to Control, but Not Economic Realities?

Ken Dau-Schmidt asks the following question--if anyone has a case that comes to mind you can email Ken or, better yet, post a comment, as I couldn't think of an example but would love to see one:

Are there any cases where a worker is an employee under the right to control test, but NOT an employee under the economic realities test?  You’d need a worker who was controlled, but not economically dependent. It’s not hard to find cases where workers are employees under the economic realities test but not an employee under the right to control test (the news boys case under the NLRA or the pickle picker cases under the FLSA) but I’m not sure I’ve ever seen a case the other way around.

-Jeff Hirsch

 

January 21, 2018 in Employment Common Law | Permalink | Comments (3)

Wednesday, January 17, 2018

The Legal Case Against Weinstein’s Suppression Efforts

WeinsteinLynne Bernabei (founding partner) and Kristen Sinisi (senior associate), Bernabei & Kabat in D.C., have published in Law 360 The Legal Case Against Weinstein’s Suppression Efforts. With permission of the authors and of Law360, I am reproducing their article here in full:

For decades, disgraced film producer Harvey Weinstein succeeded in silencing his victims. Authorities in three different countries are now considering whether to bring criminal charges against him, but will he have the same success burying information in the courts as he did on the job?

More than eighty women have spoken up publicly about Weinstein’s pattern of sexual assault spanning more than three decades. A recent report from The New Yorker substantiated the fear Weinstein’s victims faced in coming forward. The Hollywood mogul did not limit his retribution to empty threats. Weinstein engaged private intelligence companies — Kroll and Black Cube — to dig up dirt on his sexual accusers and the media members who threatened to air victims’ stories. Weinstein leveraged the information to keep his victims quiet, and until recently, it worked.

An alarming number of victims have come forward about the sexual assault and harassment they faced at the hands of Weinstein, but questions remain about the judicial system’s ability to serve justice. In the United States, many of the public claims against Weinstein are likely time-barred. Authorities in London who are investigating Weinstein with respect to nearly a dozen victims there may fare better, given that it does not have a strict statute of limitations for serious sex crimes.

Another question about the limits of the judicial system concerns evidence that prosecutors may be able to collect from Weinstein’s former attorney, David Boies. Initially, Boies’ involvement with Weinstein was thought to be limited to helping him negotiate a new employment contract with The Weinstein Company when his contract came up for renewal in 2015. At that time, Boies negotiated terms that enabled Weinstein to keep his job despite his criminal misdeeds (in the absence of a criminal indictment or verdict or fraud against the company).

As if that weren’t enough, The New Yorker’s report revealed that Boies’ involvement in the Weinstein web ran deeper than previously known. In July 2017, as The New York Times, then another Boies client in unrelated litigation, prepared to release a story about the allegations against Weinstein, Boies took steps to bury the stories.

He personally executed an agreement retaining the services of Black Cube, a business intelligence company comprised of a “select group of veterans of elite units in the Israeli intelligence community,” on behalf of Weinstein. The agreement’s primary objectives included “[p]rovid[ing] intelligence which will help [Weinstein]’s efforts to completely stop the publication of a new negative article in a leading NY newspaper.”

Black Cube defined “success,” entitling it to a $300,000 “success fee,” as “stop[ping] the Article from being published at all in any shape or form.” Although Boies released a statement in which he said that he engaged Black Cube merely to vet the accuracy of the Times’ article, the express contract provisions he signed contradict that claim.

Boies went on to say that he declined to represent Weinstein with respect to the alleged sexual assaults for which Weinstein hired other counsel and that he told Weinstein “the Times story could not be stopped through threats or influence.” Boies further stated that Weinstein and the counsel he engaged selected private investigators to assist him and drafted a contract, which Weinstein asked Boies to sign. Although Boies signed the agreement, he denied selecting the investigators or directing or controlling their work, tasks which Weinstein and his lawyers did, according to Boies.

This sets out another problem for Weinstein and Boies: can Boies be compelled to provide evidence about his communications with Weinstein because this contract had nothing to do with providing legal advice?

 

Continue reading

January 17, 2018 in Employment Discrimination | Permalink | Comments (0)

Monday, January 15, 2018

Will New Tax Law Make Everyone an Independent Contractor?

ICShu-Yi Oei & Diane M. Ring (both of Boston College Law) have just posted on SSRN their essay Is New Code Section 199A Really Going to Turn Us All into Independent Contractors? Here's the abstract:

There has been a lot of interest lately in new IRC Section 199A, the new qualified business income (QBI) deduction that grants passthroughs, including qualifying workers who are independent contractors (and not employees), a deduction equal to 20% of a specially calculated base amount of income. One of the important themes that has arisen is its effect on work and labor markets, and the notion that the new deduction creates an incentive for businesses to shift to independent contractor classification. A question that has been percolating in the press, blogs, and on social media is whether new Section 199A is going to create a big shift in the workplace and cause many workers to be reclassified as independent contractors.

Is this really going to happen? How large an effect will tax have on labor markets and arrangements? We think that predicting and assessing the impact of this new provision is a rather nuanced and complicated question. There is an intersection of incentives, disincentives and risks in play among various actors and across different legal fields, not just tax. Here, we provide an initial roadmap for approaching this analysis. We do so drawing on academic work we have done over the past few years on worker classification in tax and other legal fields.

rb

January 15, 2018 in Employment Common Law, Workplace Trends | Permalink | Comments (0)

Terri Beiner Named UALR Law Dean

BeinerCongratulations to Terri Beiner, who has been named dean of University of Arkansas - Little Rock School of Law. UALR is fortunate to have her at the helm!

rb

January 15, 2018 in Faculty News | Permalink | Comments (0)

Friday, January 12, 2018

Federal Law Clerk Handbook Amended to Address Harassment Complaints

ComplaintI am re-posting in its entirety, with permission, a post by Jennifer North over at Appellate Advocacy Blog:

Sexual harassment claims reached the federal judiciary when Judge Alex Kozinski was accused of sexual misconduct a few weeks ago. He has since resigned. As Tessa wrote here yesterday, one thing that kept some clerks from coming forward to report this misconduct was the policy of strict confidentiality that clerks must uphold while in chambers with their judges. Some judges, like Kozinski, may further rigidly enforce this pact as well, making it very difficult for clerks or other judicial employees to make reports.

In rapid response to this concern the Federal Judicial Center amended the Federal Law Clerk Handbook yesterday to read:

In a section of the clerk handbook that proclaimed “law clerks owe judges complete confidentiality as to case-related matters,” two boldfaced sentences were added:

“However, nothing in this handbook, or in the Code of Conduct, prevents a clerk, or any judiciary employee, from revealing misconduct, including sexual or other forms of harassment, by their judge or any person. Clerks are encouraged to bring such matters to the attention of an appropriate judge or other official.”

Concurrently, a signature campaign has been circulated to former law clerks and others urging for clarification on the confidentiality rules. It seems at least with regard to the Handbook, the amendment above may be sufficient to ensure judicial personnel feel comfortable making reports. The letter is due to be delivered on Thursday, December 21, 2017, to "Third Circuit Judge Anthony Scirica, chair of the Judicial Conference’s Committee on Judicial Conduct and Disability, Judge Jeremy Fogel, director of the Federal Judicial Center, James Duff, director of the Administrative Office of the U.S. Courts, and Chief Justice John Roberts Jr. in his capacity as presiding officer of the Judicial Conference." The United States Supreme Court is not governed by the Judicial Conference, and the letter makes no recommendations to the Court.

The letter can be found here and will remain open for signature.

rb

January 12, 2018 in Employment Discrimination | Permalink | Comments (0)

Student Writing Competition on Employee Benefits

AcebPaul Caron over at TaxProf Blog sends word that the American College of Employee Benefits Counsel is sponsoring its 14th Annual Employee Benefits Writing Competition on any topic in the field of employee benefits law. The competition is open to any J.D. and graduate (L.L.M. or S.J.D) law students enrolled at any time between August 15, 2017 and August 15, 2018. Two $1,500 prizes may be awarded. The submission deadline is June 1, 2018.

rb

January 12, 2018 in Pension and Benefits, Scholarship, Teaching | Permalink | Comments (0)

18th Annual Women and the Law Conference

Thanks to Susan Bisom-Rapp (TJSL) for sending the announcement below of the 18th Annual Women and the Law Conference and the 16th Ginsburg Lecture. Details are below.

Women

rb

January 12, 2018 in Conferences & Colloquia, Employment Discrimination | Permalink | Comments (0)

The "Signaling" Effect of Raising Minimum Wage Laws

HelmanI posted yesterday on the conference earlier this week on minimum wage laws in developing countries. Daniel Helman (Ton Duc Thang University, Labor Relations & Trade Unions) circulated a follow-up email making a point about minimum wage laws I hadn't considered before. I suspect his argument has equal force when a single state or municipality in the U.S. raises its minimum wage significantly above (extraordinarily low, by any historical standard) national base rate. Here is Daniel's argument:

During my recent visits to Australia and Singapore (in December) I spent some time networking with academic colleagues. In both places people were talking about how Vietnam was projected to be the most important economy in SE Asia in twenty years. One of the key indicators of this projection is the rate of rise of wages here in Vietnam. The rapid wage increase is seen as a reflection of economic strength and an indicator of future economic growth.

Thus the trend in wage increases signals to the rest of the world that the economy of Vietnam is becoming increasingly robust. Such a signal leads to foreign investment at a consumer level—as international companies aim to establish an economic presence here in Vietnam. They do this now so that in the future, as the domestic demand is large, they will have a well-established presence and will be able to command a large share of the market in their sector.

***

Of course Vietnam has other features that influence its future success, such as a single-party system which allows for more focused and beneficial policies to be implemented more easily than in other systems; and a culture that is perhaps more focused on its own success after so much hardship for so many decades; and other intangibles, such as respect for the role of work and effort in the family. But the increase in wages—based in large part on the increases in the minimum wage over the past several years, has done a great deal to place Vietnam very high in its economic forecast. Such a signal leads to future investment, and these facts can form a strategy to (rightly) promote future increases in the minimum wage here so that it will reach the level of a living wage sufficient to meet more basic needs. It is similar to the point [ILO Vietnam Country Director] Dr. Chang-Hee Lee made on the first day [of the conference], about how increases in the minimum wage increase demand.

Obviously the totality of pathways and feedbacks are more complicated than what I have written above, but the essential point is that the rate of increase in wages is a signal of the growing robustness of the domestic market; and that this signal is read by global economic stakeholders and influences their behavior.

rb

January 12, 2018 in Conferences & Colloquia, International & Comparative L.E.L., Wage & Hour | Permalink | Comments (0)

Thursday, January 11, 2018

Minimum Wage Laws in SE Asia

TdtuEarlier this week I participated in a conference on minimum wage laws in Viet Nam (and SE Asia generally) at the Tôn Đức Thắng University Labor College in Ho Chi Minh City (Saigon), Viet Nam. International wage & hour law is not my specialty, so it was a pleasure to learn from the many law faculty, workers' advocates, employer representatives, and even even the former head of the VGCL (the government-controlled unified trade union) attending. My key take-aways:

  • The traditional neoclassical economic argument that increasing the minimum wage decreases employment may have even less salience in developing countries than in developed ones. Even in the countries like Viet Nam that produce a large quantity of the clothing, electronics, and other goods consumed in the West, the vast majority of workers still work in services and manufacturing for the local economy. Raising minimum wages can increase both worker productivity and domestic consumption, which can have a positive effect on economic growth and employment and thus offset potential negative effects.

  • The risk of capital flight in response to raising the minimum wage is overstated. A MNC that has built a factory here is unlikely to relocate it because of a requirement that it spend an extra few cents per hour on wages. It's less clear how increases in minimum wage laws might influence future capital allocation decisions.

  • Companies looking to maximize profits by minimizing labor costs are barking up the wrong tree -- they should instead be looking to cut supply-chain costs. The pair of Nikes we spend $150 for in the West costs about $12 to make, of which $2-3 is labor costs. The $138 difference between retail price and cost-of-production is where companies should be looking if they want to squeeze further profits. Nike could slash those costs by vertically integrating, which would have the salutary effect of making Nike directly and obviously responsible for the workers who make the company's shoes. The fact that the Nikes of the world aren't doing this is telling.
  • The proportion of workers in the informal economy has a huge impact on the efficacy of minimum wage laws. Minimum wage laws may actually exacerbate wage inequality in countries where a large proportion of workers are off-the-books.
  • Minimum wage laws can perform an important signaling effect in developing countries. I'll add a guest post on this topic shortly.

rb

January 11, 2018 in Conferences & Colloquia, International & Comparative L.E.L., Wage & Hour | Permalink | Comments (0)