The Challenge of Misclassification in the Gig Economy

According to a 2016 Pew Research survey, some 24% of American adults have used some sort of digital commerce platform to earn money. This approach to earning a living is considered part of the gig employment phenomenon. In a 2016 study conducted by Harvard’s Lawrence Katz and Princeton’s Alan Krueger, 16% of American workers work for a temporary help agency, contract as independent contractors, or hold an on-call position. Current trends anticipate the gig economy to comprise more of the workforce in the future. In this issue of Astronology®, we look into the recent trend of gig employment and a critical challenge surrounding it.

In 2015, the Economic Policy Institute (EPI) reported that workers misclassified as independent contractors had grown considerably. Also stated in the report was that “New ‘sharing economy’ [also known as gig economy] businesses create cause for concern about misclassification because it is unclear how ‘autonomous’ these workers really are.” The report further expresses, “Employers who misclassify avoid paying payroll taxes and workers’ compensation insurance, are not responsible for providing health insurance, and are able to bypass requirements of the Fair Labor Standards Act, as well as the 1986 Immigration Reform and Control Act.”

A direct result of this misclassification is gig workers being forced to pay the full ACA tax or purchase their own health insurance. However, these costs may not be within their gig incomes. These conditions have given rise to lawsuits alongside the rise of gig-like jobs. For instance, Lyft recently settled a $27 million class-action lawsuit brought by drivers seeking to be classified as employees. Currently, Uber is in court for a similar class-action lawsuit. In light of this, the next question to consider is if labor laws will ever catch up to the rise of the gig industry.

Some employers have lobbied state legislatures to assist in legal coverage. In response, 28 states have legalized ride-hailing services, such as Uber and Lyft, labeling their workers as independent contractors. In Arizona, all workers using online labor platforms for work are considered independent contractors. This means that, while workers will find it hard to file successful claims for state-run benefit programs, gig workers still retain the right to sue over benefits and protections owed to employees under federal law. In New York and Washington, portable benefits, an encompassing benefit program designed for independent workers, are being considered.

As the workforce continues to change and more independent workers comprise our labor force, it will be important to see how legislatures continue to react. Do you work for an organization that supports or has some form of independent workers? How large a part of your organization are gig workers? How does your organization support gig workers? Please share your thoughts in our comments section below!

Employment Application Design: Do's and Don'ts

An organization’s employment application can sometimes help or hinder the hiring process. Well-meaning questions can come off as discriminatory.  Weakly designed applications won’t give you the proper amount of information to make an effective decision on whether or not to interview a candidate. In this issue of Astronology®, we discuss the factors surrounding employment application design.

              A major concern most organizations will have when designing their employment applications is ensuring they are not violating any laws.  What type of questions should employers avoid? An innocent mistake such as including a date of birth or date of high school graduation section could spell trouble, for instance. The Age Discrimination in Employment Act protects employees ages 40 and over.  As a result, requesting a date of birth or graduation can make it appear that a candidate could be rejected due to his / her age.  An exception in this circumstance may be if the applicant is under the age of 18. Some other laws to consider when selecting the type of questions to include on your organization’s employment application are the following:

• Equal Employment Opportunity Commission (EEOC) guidelines: Encompasses questions involving identifying an applicant’s age, race, national origin, sex, physical characteristics, religion, and other related personal information such as arrests and convictions.
• Americans with Disabilities Act (ADA): Encompasses questions involving an applicant’s health history and / or handicaps (if any exist).
• Immigration Reform and Control Act: Encompasses questions involving an applicant’s citizenship. Remember, the Form I-9 will assist in balancing an employer’s compliance in establishing a worker’s eligibility to accept employment in the United States.
• State Violations: Certain states have strict laws pertaining to employer rights to information about an applicant’s past salary history, credit, sexual orientation, and even access to transportation. Make sure you are aware of your state’s laws.

               By avoiding the personal questions, how do we get to know the applicant? While organizations are looking for the best fit, the core questions / sections to include are

·       Contact information

·       Position the applicant is seeking

·       Hours of availability

·       Expected salary

·       Past experience

·       Education

·       Additional detailed information such as an applicant’s experience with a specific tool, software, or equipment, willingness to travel, willingness to perform specific tasks, and even examples of when the applicant worked with a team (if related to position)

·       Closing statements

               In particular, the closing statements can include information to help organizations avoid finding themselves involved in lawsuits without being given notice. Such statements mentioned in an INC.com online article are the following:

·       Statements related to equal employment opportunities practices

·       Consequences for including information not requested on the application

·       Instructions for disabled applicants to ensure compliance with the Americans with Disabilities Act

·       Notices regarding the length of time the information will be kept on file

·       Requests that applicants certify the accuracy of the information

               As the Astron Solutions team is not legal professionals, consulting with employment law professionals is extremely advisable, to ensure no possible legal violations are incurred through your organization’s employment application. Are there any special questions your organization uses on your employment application? Share with Astronology®!

Glassdoor's 25 Best Jobs in America for 2016

Recently, Glassdoor presented a list of the 25 "Best Jobs" in America for this year.

Criteria for this list included:

• Number of Job Openings
• Salary
• Career Opportunity

I personally thought I would see more tech-sector positions, yet surprisingly the top 5 job positions are:

• Data Scientist
• Tax Manager
• Solutions Architect
• Engagement Manager
• Mobile Developer

Did you find anything surprising in Glassdoor's findings?

Wall Street Hiring, Vacation Time, The White House and Chris Rock

Some Friday links before you start your weekend.

From the New York Times via MSNBC, come word that Wall Street is starting to anticipate a recovery--and hiring has started with it. This is not news Main Street wants to hear about Wall Street:

The increase in hiring and cautious optimism stand in sharp contrast to the mood among workers in other fields, where jobs have been slow to return or are disappearing altogether. Since June 2008 the number of jobs has shrunk by nearly 14 percent in manufacturing and by 22 percent in construction, but only by 8.5 percent in the financial industry nationwide.

It is also the opposite of what is going in other highly paid, white-collar professions like law, where employment nationwide in June was the lowest since late 2001, according to data from the Bureau of Labor Statistics.

The financial work force in New York has shrunk by more than 28,000 since its peak in January 2008, but is still slightly above its level in 2003 after the tech bubble burst, meaning it actually weathered this recession — the worst since the Depression — better than the previous one. Nationally, staffing is back to where it was in late 2005, while employment in the overall economy is near 2004 levels.

Next, Monster has some advice about being smart about vacation time. The big advice they give is to be aware of your benefits, prepare before you go, and to have set rules about contact while you're gone.

A New Generation Chasing the American Dream

On Tuesday the New York Times posted a column about a new generation of Americans who are finding the "American Dream" elusive in the current economic environment. The article is still the most e-mailed piece on the New York Times website, and rightfully so. As the article talks about "an age group — the so-called millennials, 18 to 29 — whose unemployment rate of nearly 14 percent approaches the levels of that group in the Great Depression." The rest of the article is equally bleak for the millennials:

For young adults, the prospects in the workplace, even for the college-educated, have rarely been so bleak. Apart from the 14 percent who are unemployed and seeking work, as Scott Nicholson is, 23 percent are not even seeking a job, according to data from the Bureau of Labor Statistics. The total, 37 percent, is the highest in more than three decades and a rate reminiscent of the 1930s. 

The college-educated among these young adults are better off. But nearly 17 percent are either unemployed or not seeking work, a record level (although some are in graduate school). The unemployment rate for college-educated young adults, 5.5 percent, is nearly double what it was on the eve of the Great Recession, in 2007, and the highest level — by almost two percentage points — since the bureau started to keep records in 1994 for those with at least four years of college.

Yet surveys show that the majority of the nation’s millennials remain confident, as Scott Nicholson is, that they will have satisfactory careers. They have a lot going for them.

“They are better educated than previous generations and they were raised by baby boomers who lavished a lot of attention on their children,” said Andrew Kohut, the Pew Research Center’s director. That helps to explain their persistent optimism, even as they struggle to succeed.

Unemployed...and Frustrated

On this Good Friday, we bring you some good links that are not so good if you're unemployed:

It's frustrating when you go through a few interviews and don't get a job offer. But one person went through 52 interviews at Goldman Sachs and got only one job offer according to Here Is The City (H/T Wendy). Wow

How many people are taking jobs right now they are overqualified for? But it doesn't mean they aren't really happy to be employed according to the New York Times (H/T Sarah and picture from the NYT article)

There is one time when "any work" is worse than "no work": unemployment benefits and the Christian Science Monitor via Yahoo! explains (H/T Wendy)

And Tom Delay, you have egg on your face after saying that people are unemployed because they want to be. Details of that non-PC and non-true statement from Huffington Post via Yahoo! (H/T Wendy)

Industries Hit Hardest by Job Losses and States With the Highest Taxes

Yesterday we talked about the hiring freeze thawing and the Wall Street bonuses growing, and today we have two more topics to discuss with you.

Investopedia via Yahoo! Finance has an interesting look at the three industries hardest hit by job losses and the job loss market as a whole (H/T Wendy). The amazing part is that since I started working in my current role in December of 2007, unemployment has almost doubled from 7.7 million Americans to 14.8 million. To make matters worse, the article says that the number of workers unemployed for 27 weeks or longer has soared to a record 6.3 million people. And 661,000 have just dropped out of the labor market entirely. These people don't count against the unemployment rate which means that even more people are not working than the unemployment percentage shows.

The three biggest industries hit by jobs losses are construction, transportation and warehousing, and manufacturing. There are only a few industries which have seen an increase in their employment. The temporary help services industry saw a bump as well as health care and the federal government (mostly due to the upcoming census). This proves that while jobs seem to continually be disappearing, looking in the right places shows that hiring is occurring.

Our second article, from The Guardian, looks at the actual tax rates of different US states (H/T Jay). It starts with the premise that many people are complaining at California taxes but California comes in 6th at an average of 10.5% on an average per capita income of $47,706 (2008). The real problem is in the Tri-State Area. New Jersey is #1 with 11.8% on $56,116, New York is #2 with 11.7% on $55,032. Connecticut is #3 with 11.1% on $63,160, with Maryland and Hawaii rounding out the top 5 (unfortunately I get taxed by both New York and Connecticut...eek!).

Massachusetts surprised the author of the post (and me) by coming in at 23rd. The South, while a lower tax rate in many states, also has a lower average per capita income. Wyoming seems to be the best bet to keep the most of your high salary with only 7% on $53,163. Some things to think about when relocating for a job!

Picture from Select Leaders

Hiring Freeze Thawing and Wall Street Bonuses

It's a mega link week here at Astron's World of HR blog.

First, from The Journal of Commerce, an interesting article about the hiring freeze starting thaw (H/T Wendy). The article does point, out, however that the road to recovery is just beginning and overall the U.S. job market is pretty flat (with unemployment hovering at 9%-10%). (Picture also from this article).

Next, The Wall Street Journal came out with the numbers yesterday that Wall Street bonuses were up 17% to $20.3 billion in 2009. Now, while it's not surprising that bonuses are up after last year's bonus-busting recession and the tight regulation on Wall Street bonuses, it is still disconcerting to much of Main Street that their tax dollars went to Wall Street for this. The interactive graph that accompanies the article is a good view to show how crazy the bonuses have gotten on Wall Street. You have to figure that many of these bonuses were "making up" for last year. But while most of America is dealing with unemployment, hearing that the average bonus was $124,850 and the average compensation was $340,000 has to be upsetting to many.

Tomorrow we'll get more into the job losses that we talked about as well as looking at which states tax you the most.

Real Unemployment and the Future of HR

We start you off on this Monday morning with a link from the Huffington Post which says that the real unemployment number is at a dismal 19% and we're 22.4 million jobs short of having a full unemployment rate of 5%. Ouch.

Speaking of the unemployed, The 405 Club (a great blog name) has a post about what really bothers the author about not having a full-time, steady, paying job.

Lastly, UpstartHR has a look at the future of HR and asks "is it you?" Some keys they give are:

• Know what impact you want to have
• Ask smart questions
• Identify a potential path
• Take charge of your professional development
• Stay flexible

 Some good advice, indeed! 

What I’m Hearing…Redefining Yourself

Before I get into my blog post for today, I want to apologize for not having posted in a while! Business activities to successfully navigate these challenging economic seas have kept me going an average of 14 hours a day. And I have found Twitter to be quite fascinating. However, further excuses will only slow down my latest post, so on with the show!


Yesterday I was part of an HR/NY panel discussion on “Overcoming the Fear: Strategies for Success in Today’s Economy.” A good part of the discussion was on personal branding. Do professionals think of themselves as the composite of all their varied skills and experiences, gained through work, volunteering, recreation activities, and the like? Or do we box ourselves into categories: I am a recruiter. I am a trainer.

The consensus among the panelists, as well as the audience, was that in order to be successful, viewing yourself in small tight compartments aren’t going to work. Now or in the future. If you want a job as a trainer, that’s of course OK. However, you may need to repackage yourself to highlight the complementary skill set that an organization needs. Is training moving more towards on-line media? What experiences do you have in this area that you acquired through volunteer work?


A former student of mine, who was heavily focused in recruitment, was recently downsized. After reflection on his experiences, he realized that his skills were as useful in the corporate and non-profit worlds as they are in a university setting – focusing on student enrollments. A whole new world has opened for him by taking the chance to think differently.


It can be scary to think of yourself as something different than what you’ve always been. However, each of us is unique and possess many skills and talents, many of which we probably take for granted. When was the last time you took a personal inventory to determine all the wonderful things you are? Refreshing your résumé after that inward look may result in a whole new series of doors opening for you.