Transcript
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