Contractors can be ’employees’; less than 2% of job ads are global-talent friendly

In the news this week: Biden says more contractors should be classed as employees; US workers have better financial wellness; while staff would take a 8% pay cut to work partially/fully remote:

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Jan 11, 2024
This article is part of a series called The Most Interesting HR Stories of the Week.

Biden tells employers to regard workers as employees not contractors

The US Department of Labor has this week issued a final rule that will now force companies to treat some workers as ‘employees’ [complete with all the perks and benefits a regular employee gets], rather than less expensive independent contractors. Acting US Labor Secretary, Julie Su, said the misclassification of workers as contractors rather than employees harmed low-income workers in particular – those who would benefit the most from legal protections afforded to employees (such as a minimum wage and unemployment insurance). The move – which has been the topic of fierce debate for years – is already reported to have “riled business groups,” and will likely prompt legal challenges. Since most federal and state labour laws require minimum wages and overtime pay to employees only, studies suggest ‘employees’ cost companies up to 30% more than independent contractors. As such, the ruling is widely expected to increase the labor costs of employers that typically rely on ‘gig’ or contractor workers. The rule will require that workers be considered as employees rather than contractors when they are “economically dependent” on a company. It replaces a regulation by former President, Donald Trump’s administration, that had made it easier to classify workers as independent contractors. But the new rule is now likely to be challenged in court by trade groups and businesses.

Less than 2% of US job ads are “friendly to global talent”

New research by Pittsburgh-based education technology company, F1 Hire, suggests that only 1.6% of all US job ads could be deemed “friendly to global talent.” According to its inaugural International Talent Friendliness Index (or ITFI) – the first human resources index to benchmark US hiring companies’ willingness to accept international talents – F1 Hire finds that just 1.6% of 713,000 ads analysed contained international talent-friendly working. Some 12% of the job openings specifically stated “do not apply without US citizenship or green card.” F1 Hire says it wants to see 10% of all ads have international-friendly wording. “We are dedicated to raising awareness among employers who have never hired international talent,” commented Andrew Chen, CEO of F1 Hire. The adverts looked at were analyzed using advanced AI technology, to look at job descriptions and pinpoint language that signified the availability of visa sponsorship, or willingness to accept CPT/OPT/H1-B/H-1B Transfer. The ITFI calculates the ratio of job openings that are sponsorship-friendly by dividing by the total job openings with the number of sponsorship-friendly job openings.

SpaceX illegally fired workers critical of Elon Musk, according to NLRB

Papers revealed by the National Labor Relations Board (NLRB) show it is pursuing rocket and satellite maker, SpaceX, for unlawfully firing eight employees after they circulated a letter describing founder and CEO, Elon Musk, as a “distraction and an embarrassment.” The letter, sent to SpaceX executives on June 2022, referred to a series of tweets Musk had made since 2020, many of which were sexually suggestive. The employees claimed Musk’s statements did not align with the company’s policies on diversity and workplace misconduct, and called on SpaceX to condemn them. The NLRB claims SpaceX violated the workers’ rights under federal labor law to band together and advocate for better working conditions. If SpaceX does not settle, the case will be heard by an administrative judge, whose decision can be appealed to the board and then to a federal appeals court. A hearing is scheduled for March 5. If the NLRB finds the firings violated labor law, it can order that the workers involved should be reinstated and awarded appropriate levels of back pay. If SpaceX is found to have violated the law, it could also face steeper penalties if future cases are brought before the board.

US employees score higher for financial wellness

US workers are – it seems – more savvy with their money, after research by financial education platform, nudge, found Americans scored better than their UK and EU counterparts for financial wellbeing. According to its global Financial Wellness Index (which analysed data from over 20,000 global employees), workers in the United States have an overall financial health score of 62/100 and an average financial saving score of 64/100. The latter is 10 points higher than the global average saving score (54/100). According to Tim Perkins, nudge co-founder and CEO, US workers need to be more “tactical with their money,” compared to other countries, because there are fewer ‘social safety nets.’ He said: “Americans are also more proactive with their finances. Some 65% of adults in the US invest in stocks and shares, reflecting a proactive approach toward securing their future and eventual retirement.” The UK has a lower overall financial health score of 59/100, while France has an average overall health score of 58/100 and Spain has an overall health score of 50/100. That said though, according to data from AWS, finances are still the number-one source of stress for staff at all income levels. Around 52% of employees with an annual household income of $100,000 or more report feeling “stressed by their finances.”

…as workers would take an 8% pay cut to work from home

Prospective employees would be willing to take an 8% annual pay cut for a job that’s partially or fully remote, according to Stanford economic, Nicholas Bloom. Speaking to USA Today, he said the $4,600 a year loss this would equate to (based on a $57,200 average US wage), would more than be made up by the $6,000 emloyees would save in commuting costs if they worked from home 50% of the time in a hybrid position, and up to $12,000 if they’re fully remote. On average, a commuter in the US spends $8,466 going to and from their work site in a year, or about 19% of their annual income, according to agent-matching service Clever Real Estate. Nicholas Bloom, a Stanford University economist, is a leading voice in remote-work research.

US jobs growth ends on a high

The US ended 2023 on a high, after official figures revealed that 216,000 jobs were added to payrolls in December 2023, meaning all the jobs lost through the Covid-19 pandemic have effectively been regained. The non-farm payrolls figure was higher than forecasts suggested, and higher than November’s total of 173,000. Wage growth of 4.1% for December also capped off another strong year of wage increases. “Workers still have the upper hand in the current environment, with strong wage growth and plenty of job opportunities,” commented Nationwide senior economist, Ben Ayers. However, with wages growing at more than 4%, the likelihood is that the Federal Bank will now come under more pressure to cut interest rates. The Fed held the benchmark interest rate steady at its December meeting. But the language used in its policy statement after the December 12-13 session was changed to allow the possibility that no further rate increases will be needed, while new projections showed a majority of policymakers expect rate cuts of three quarters of a percentage point will be appropriate by the end of the year. The latest employment figures, collated by the Bureau of Labor Statistics, also showed unemployment remained at 3.7 per cent in December.

…as fastest growing cities for jobs is revealed

Jacksonville, Florida; Raleigh, North Carolina; and Las Vegas, Nevada have all been declared the three cities (with populations larger than one million), to have experienced the fastest growth in employment from November 2022-November 2023. Jacksonville’s recorded a 3.8% change in employment during the previous twelve months to November – as did Las Vegas and Raleigh, which also recorded the same rise. Employment also grew notably in Dallas, Texas ((up 3.3%); Birmingham, Alabama (up 3.0%); and Miami, Florida (3.0). Among cities with fewer than 1 million residents, the places where employment increased the most, were Lawrence, Kansas (9.7%); Charleston, South Carolina (5.9%); and Salinas, California (4.5%). The data, released by the Bureau of Labor Statistics, also found that amongst cities with more than one-million people, the slowest growing conurbations were Seattle-Tacoma-Bellevue, WA (2.0%); Salt Lake City, UT (2.1%) and Nashville-Davidson-Murfreesboro-Franklin, TN (2.1%). Twelve of the top growing cities recorded employment growth of 2.5% or above.


This article is part of a series called The Most Interesting HR Stories of the Week.