Meljun Cortes Ethics Employer Employee Issues

MELJUN CORTES Ethics Employer Employee Issues
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Ethics in Information Technology, Second Edition Chapter 8 Employer/Employee Issues Objectives • What are contingent workers, and how are they frequently employed in the information technology industry? • What key ethical issues are associated with the use of contingent workers, including H-1B visa holders and offshore outsourcing companies? Objectives (continued) • What is whistle-blowing, and what ethical issues are associated with it? • What is an effective whistle-blowing process? Use of Nontraditional Workers • Bureau of Labor Statistics (BLS) develops 10-year projections of – Economic growth – Employment by industry and occupation – Composition of labor force • Period from 2002 to 2012 – Employment growth will be concentrated in the service-providing sector of the economy – 9 out of 10 positions in health and IT Industries with Fastest Employment Growth (2002–2012) Industries with Fastest Employment Growth (2002–2012) (continued) Use of Nontraditional Workers (continued) • Number of computer science candidates – Dropped 33% • Number of master’s candidates – Dropped 25% • IT firms are concerned about the shortfall – Turn to nontraditional sources including • Contingent workers • H-1B workers • Outsourced offshore workers Contingent Workers • Include: – – – – Independent contractors Workers brought in through employment agencies On-call or day laborers On-site workers provided by contract firms • Represents 4 to 7 percent of the U.S. workforce • Needed for pronounced fluctuations in staffing needs • Workers are there for the life of the project only Contingent Workers (continued) • Sources – Temporary help – Employee leasing • Firms that provide temporary help – Recruit, train, and test their employees in a wide range of job categories and skill levels – Assign them to clients Contingent Workers (continued) • Employee leasing – Business outsources all or part of its workforce to a professional employer organization – Subject to special regulations regarding workers’ compensation and unemployment insurance • Coemployment relationship – Two employers have actual or potential legal rights and duties with respect to the same employee or group of employees Contingent Workers (continued) • Advantages of using contingent workers – Business does not pay for benefits – Can continually adjust the number of contingent workers to stay consistent with its business needs – Does not customarily incur training costs Contingent Workers (continued) • Disadvantages of using contingent workers – May lack a strong relationship with the firm • Low commitment to the company and its projects • High turnover rate – Workers gain valuable practical experience working within a company’s structure and culture • Lost when workers depart at the project’s completion Contingent Workers (continued) • When deciding to use contingent workers – Recognize the trade-off between • Completing a single project quickly and cheaply • Developing people in the organization – When staffing is truly temporary • Use of contingent workers is a good approach – Think twice about using contingent workers • When they are likely to learn corporate processes and strategies that are key to the company’s success Contingent Workers (continued) • Deciding to use contingent workers – Can raise ethical and legal issues – Potential liability for • Withholding payroll taxes • Payment of employee retirement benefits and health insurance premiums • Administration of worker’s compensation Contingent Workers (continued) • Deciding when to use contingent workers – Contingent workers can be viewed as permanent employees by • Internal Revenue Service • Labor Department • State’s worker compensation and unemployment agencies – Vizcaino v. Microsoft lawsuit • Employers must exercise care in the treatment of contingent workers Manager’s Checklist for the Use of Contingent Employees H-1B Workers • Temporary working visa • Granted by the U.S. Citizenship and Immigration Services (USCIS) • For people who work in specialty occupations • Meet critical business needs • Obtain essential technical skills and knowledge not readily found in the United States • Employers must pay H-1B workers the prevailing wage for U.S. workers to do equivalent jobs H-1B Workers (continued) • Maximum continuous period of six years – After six years the foreign worker must remain outside the United States for one year before another H-1B petition can be approved • Make up less than 0.1 percent of the U.S. workforce – Nearly 40 percent are employed as computer programmers H-1B Workers (continued) • Top five source countries – – – – – India China Canada United Kingdom Philippines • Congress sets a federal cap on the number of H1B visas – Applies only to certain IT professionals at private technology companies H-1B Workers (continued) • Continued use of H-1B – Symptom of a larger, more fundamental problem – United States is not developing sufficient IT employees with the right skills to meet corporate needs Number of H-1B Visas Granted by USCIS H-1B Workers (continued) • English as a second language – Workers are not fluent in English – May find it difficult and uncomfortable to participate – May create their own cliques • Stop trying to acclimate • Can hurt a project team’s morale and lead to division • Managers and coworkers should – Strive to help improve H-1B workers’ English skills and cultural understanding – Be sensitive to heritage and needs H-1B Workers (continued) • H-1B application process – Person must have a job offer from an employer who is also willing to offer sponsorship – Application has two stages • Labor Condition Attestation (LCA) • H-1B visa application – If the H-1B contingent makes up more than 15 percent of a workforce, a company must prove that it first tried to find U.S. workers before it can hire more H-1Bs H-1B Workers (continued) • American Competitiveness in the Twenty-First Century Act – Allows current H-1B holders to start working for employers as soon as their petitions are filed • Using H-1B workers instead of U.S. workers lessens the incentive for U.S. companies to educate and develop their own workforces H-1B Workers (continued) • Potential exploitation of H-1B workers – Salary abuse – Recent study found H1-B workers are paid an average of $13,000 less than U.S. workers in the same job – What happens at the end of the six-year visa term? Offshore Outsourcing • Outsourcing – Companies receive services from an outside organization with expertise in providing a specific function • Rationale – Lower costs – Obtain strategic flexibility – Focus on core competencies Offshore Outsourcing (continued) • Variation of outsourcing – Work done by an organization whose employees are in a foreign country • Companies can save up to 70 percent on some projects • Increasing in IT industry – Common to use offshore outsourcing for major programming projects Offshore Outsourcing (continued) • Contract programming is flourishing in – – – – – – – – – Brazil Bulgaria Canada China Ireland Israel Malaysia Malta Mexico Offshore Outsourcing (continued) • Contract programming is flourishing in – – – – The Philippines Poland Russia Singapore Offshore Outsourcing (continued) • India – – – – Rich talent pool English-speaking citizenry Low labor costs Best source of programming skills outside Europe and North America – Exports software to more than 100 countries – Companies now employ more than 400,000 software engineers Leading Countries for Providing Offshore IT Services Partial List of Offshore IT Outsourcing Firms Offshore Outsourcing (continued) • Pros and cons – Low wages • Increasing due to demand – Dramatically speeds up development efforts • Make progress on a project around the clock – – – – Additional time to select an offshore vendor Additional costs for travel and communications Same ethical issues as H1-B and contingent workers Difficulty of communicating directly with people over long distances Offshore Outsourcing (continued) • Five basic prerequisites: – Expertise in technologies involved in the project – Project manager who speaks the employer company’s native language – Large staff available – Good telecommunications setup – Good on-site managers available from outsourcing partner Offshore Outsourcing (continued) • Tends to upset domestic staff • Cultural differences can cause misunderstandings • Potential compromise of customer data Whistle-Blowing • Effort to attract public attention to a negligent, illegal, unethical, abusive, or dangerous act by a company that threatens the public interest • Whistle-blower – Usually has special information based on • Personal expertise • Position of employment within the offending organization Whistle-Blowing (continued) • Whistle-blower – May not be an employee • But a person with special knowledge gained from reliable sources – Risks own career – Might even affect lives of friends and family Protection for Whistle-Blowers • Protection laws allow employees to alert the proper authorities to employer actions that are unethical, illegal, or unsafe, or that violate specific public policies • No comprehensive federal law • Each law has different – Filing provisions – Administrative and judicial remedies – Statutes of limitations Legal Overview: False Claims Act • Also known as “Lincoln Law” – Enacted during the Civil War • Goal – Entice whistle-blowers to come forward – By offering them a share of the money recovered • Qui tam provision • Violators liable for three times the dollar amount that the government is defrauded • Provides strong whistle-blower protection Protection for Whistle-Blowers (continued) • Laws that encourage the reporting of any wrongdoing that would damage the environment – – – – – Clean Air Act Toxic Substances Control Act Clean Water Act Safe Drinking Water Act Comprehensive Environmental Response, Compensation, and Liability Act Protection for Whistle-Blowers (continued) • Energy Reorganization Act – Safeguards workers in nuclear power and nuclear weapons industries • Many states have created laws to prevent workers from being fired because of the employee’s participation in “protected” activities Dealing with a Whistle-Blowing Situation • • • • • • • • • Assess the seriousness of the situation Begin documentation Attempt to address the situation internally Consider escalation within the company Assess the implications of becoming a whistle-blower Use experienced resources to develop an action plan Execute the action plan Live with the consequences Very serious consequences – for the individual and the company Summary • Contingent workforce includes – – – – Independent contractors Workers brought in through employment agencies On-call or day laborers On-site workers provided by contract firms • Whistle-blowing – Employee’s effort to attract public attention to negligent, illegal, unethical, abusive, or dangerous acts by his or her company