Staff don’t think AI will erase their jobs (but CEOs do); misclassified staff win $208k

In our news round-up this week: CEOs and employees have very different views about AI reducing headcount; auto workers and Walgreens staff continue striking; payouts awarded for misclassified workers:

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Oct 26, 2023
This article is part of a series called The Most Interesting HR Stories of the Week.

Employees don’t think AI will end their jobs…but CEOs do

Research by AI company, Avanade, finds employees are broadly unconcerned by the emergence of artificial intelligence (AI), with nearly two-thirds (64%) of staff polled across 3,000 businesses believing AI will either maintain or increase the number of human roles in their organization next year. In fact, many also expect their company’s headcount to increase as a result of it – by as much as 9%. But there’s a mis-match at play here – because this isn’t how CEOs see the same technology. A significant 41% of CEOs believe AI tools will be good enough to do a large amount of an employees’ current work, requiring them to have fewer people, and need fewer skills. Commenting on the data, Florin Rotar, chief AI officer at Avanade said: “It’s really interesting to see that so many employees are rejecting the notion that AI will replace human roles, and many are foreseeing potential headcount growth.” The research also found 95% of employees believe AI will have a positive impact at work, but that only 48% of employers had implemented specific guidelines or policies to ensure AI is utilized responsibly.

Home care agency ordered to pay $208,000 in back wages and damages to misclassified staff

Nearly 100 workers misclassified as independent contractors have won $208,044 to share between them, following an investigation by the US Department of Labor. By not being classified correctly, the 96 workers involved were paid straight-time rates instead of the required rate of time-and-one-half for hours over 40 in a workweek, and paid overtime wages only for hours over 80 in a bi-weekly pay period. According the USDOL’s Wage and Hour Division, the staffing company – Reliable Home Health – was found to have not maintained proper payroll and timekeeping records. Commenting on the decision, John DuMont, wage and hour division district director said: “Hard-working home care aides provide people with essential, quality-of-life services and these workers deserve to be paid all their legally-earned wages.” Because Reliable Home Health violated the Fair Labor Standards Act, it was also issued with an injunction forbidding it from violating the FLSA in the future. “When employers misclassify employees as independent contractors and fail to pay workers their hard-earned wages, the U.S. Department of Labor will hold them legally accountable,” said Acting Regional Solicitor of Labor Samantha Thomas in Philadelphia.

US auto workers union boss says he’s still holding out for a better deal

Efforts to end the crippling auto-workers strike have seen car makers increase both their wage and benefit offers. But according to United Auto Workers (UAW) president, Shawn Fain, he’s not yet ready to cave in, arguing he’s holding out for more. Both Stellantis and GM have made wage offers that have matched Ford’s 23% over the life of a four year contract. But the union president has insisted the companies concerned can still go further: “We’ve got cards left to play, and they’ve got money left to spend,” he said. Fain has accused Ford of “pretending” it can’t afford what’s being asked for, but GM said it made an offer on Friday with “substantial movement in all key areas in an effort to reach a final agreement with the UAW and get our people back to work.” GM said its offer raises pay for most of the workforce to $40.39 an hour, or about $84,000 a year, by the end of a four-year contract. This is a 23% increase, but the UAW has been seeking 36% raises over the four years and a traditional defined-benefit pension plan for workers hired after 2007. The union’s strikes at targeted plants in each company began on September 15 and are now into their sixth week. About 23% of the union’s 146,000 members employed by the three automakers are currently on strike.

College admission tutor perks criticized for perpetuating inequality

Companies including JPMorgan Chase, American Express, Bank of America, Morgan Stanley, EY, Paramount Pictures and MasterCard, have been criticized for offering staff the perk of private coaching for college admissions. The perk – which comes in at a cost of around $140 per hour – is being used to recruit and retain workers in increasingly tight labor markets. But it is has been branded as just ‘another advantage for wealthier parents over lower-income ones’. “They’re giving resources for free to individuals not only who could afford it, but who actually don’t need it,” said Anthony Abraham Jack, associate professor of higher education leadership at Boston University and author of The Privileged Poor: How Elite Colleges Are Failing Disadvantaged Students. He added: “It calls into question not just fairness but equity, because the people in the companies and organizations that put you in the top 1% get more perks, more benefits, more freebies than those who actually need it and would benefit from it.”

Walgreens workers plotting further strike action next week

Staff at Walgreens, one of the nation’s largest drug stores, are reportedly planning a further, much larger walk-out, as they continue to argue for better wages and working conditions. Previous strikes have largely been scattered, and have had minimal impact on business, but according to CNN, new picket lines are being planned for October 30 to November 1, which aim to galvanize greater support. “Health care workers and consumers are experiencing unprecedented strain caused by understaffing by health care corporations,” said Renée Saldaña, press secretary of UHW-West Health, in a statement to CNN. Walgreens has said that it won’t “speculate on potential workforce disruptions,” adding that its “ongoing efforts since the onset of the pandemic have included an emphasis on how we recruit, retain, and reward our pharmacy staff.” Fraser Engerman, senior director of external relations at Walgreens, said the company is aggressively taking steps to address concerns about workloads, wages, hiring bonuses, flexible schedules and creating dedicated positions to manage inventory and administrative tasks for pharmacy teams. Said one striking worker: “If we could get one thing out of this, it would be for Walgreens HR to realize that we are severely understaffed for the workload they expect us to do.” She added: “We don’t want raises, we want help.”

Former National Security Agency worker admits trying to sell secrets to Russia

A former information systems security designer at the NSA has pleaded guilty to trying to sell classified information to Russia. The ex-employee, Jareh Sebastian Dalke – who was also a former Army veteran – is due to be sentenced next year, and prosecutors are said to be pushing for 22 years’ in jail. Dalke was initially arrested in 2022, after attempting to sell material to undercover agents. This included a threat assessment of the military offensive capabilities of a third, unnamed country, plus a description of sensitive US defense capabilities, some of which related to that same foreign country. He allegedly told the undercover agent that he had $237,000 in debts and had decided to work for Russia because of his heritage. The NSA is the US intelligence agency that collects and analyzes signals from foreign and domestic sources for the purpose of intelligence and counterintelligence. After Dalke left and gave the classified information to the undercover agent, prosecutors say he reapplied to work at the NSA.

Blackstone boss: remote workers do not “work as hard”

Stephen Schwarzman, the chief executive of New York-based private equity firm, Blackstone, did not mince his words when he proclaimed this week that remote workers do not work as hard as their office-attending counterparts. Speaking at a meeting in Saudi Arabia this week, the Schwarzman – who demands that all executive-level staff work in the office five days a week – said employees wanted to stay at home following the pandemic because “they didn’t work as hard, regardless of what they tell you.” He also indicated that not only do remote staff work less, but they profit from being at home too, by not spending money commuting or buying lunches out, “so their incomes are higher.” The comments come in the same week as a survey from recruiter, Hayes, finds full-time office workers now outnumber hybrid staff – those who work only a few days a week at home – for the first time since lockdowns. Companies including Disney, Apple, BlackRock, and even video conferencing provider, Zoom, are amongst the firms who have insisted employees attend the office more frequently in recent months.

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