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Microsoft Loses Temp Appeal
Posted by
emmett
on Tue Jan 11, 2000 05:04 AM
from the thaw-a-new-legal-team-smithers dept.
from the thaw-a-new-legal-team-smithers dept.
Robert Wilde writes "The Supreme Court has turned down Microsoft's appeal of a ruling, allowing 10,000 temporary employees to sue for benefits such as the right to purchase Microsoft stock at a 15% discount. This lawsuit has implications for permatemps throughout the tech industry." I'm actually interested in seeing how many of the temps take Microsoft up on buying stock options.
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Microsoft Loses Temp Appeal
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Re:this is old news (Score:3)
The requirements of a breaking news site and a community discussion site are radically different. They need to be treated differently. 'The Register' is IMHO the best breaking news site in the geek arena (sarcastic comments notwithstanding).
Slashdot's story submission system does not allow breaking stories to be posted promptly, and apparently it doesn't allow very good confirmation of the stories. Likewise, the time-based nature of the homepage doesn't allow the discussions to last much beyond 24hrs.
So can I suggest that if Slashdot wants to do news, it does news, and if it wants to do discussion forums it does them too, but that it does them in different parts of the site, with different and suitable user interfaces to each part?
Increasingly, I hear a news item on another site, only to see it on Slashdot the 10 hours later where a cursory 24hr discussion follows. That's not really a valuable resource.
Re:Temp Employees Deserve This (Score:3)
As a contractor I completely disagree with this. We do B get the short end of the stick. We very definitely get a better end of the stick than most permanent employess. Simply put: We get paid better and don't have to put up with the crap I have to put up with. The same goes for temps. If we get abused we leave. Often taking key corporate knowledge with us. The company that abuses a contractor will get what is coming to them.
If these temp workers (contractors, whatever - the principal is the same - higher pay because of the instability) want the benefits bestowed on permies they should use thier higher wage to B for those benefits. Those 15% employee discounts aren't available because employees took the risk to join the company. Contractors don't want that risk (it's funny how the "risk" has turned around - it used to be more risky to be a contractor - that's just my biased opinion though I guess).
I don't think MS is saving a buck or two in this case - I seriously think they're doing what most companies do - paying through the nose for contractors because that extra pay gets them some extra benefits (instant hire/fire, highly knowledgable workers, etc).
Fickle job market (Score:3)
The US has turned into a place where if you don't like your current situation you sue, rather than trying to change that situation. Sadly it looks like the rest of the world is trying to emulate this.
I'm also a contractor, also glad of it, and would never dream of sueing for benefits. My wife temps during the summer hols (a student), she gets paid more for being a temp - I imagine thats the same everywhere, she wouldn't dream of sueing for benefits either.
Ruling makes my life very difficult (Score:3)
A contractor is a contractor, is a contractor and not an employee. And if you agree to the contractor priniciples then you stick to it and not decide to change your mind.
Personally I think this is an incidence of sour grapes because the employees made more money through stocks. My comment is why the people never applied for jobs in the first place.
And if they were not happy with the situation, why did they not change it... But not in the form of sueing, which is a bit easy.
Understanding stock purchase plans (Score:3)
The most talked about stock deal is the "Incentive Stock Option." Depending on your performance, the company may decide to offer these to you. When they do, they'll give you options for a certain number of shares, priced at the current value as of the day they offer them to you. You can't excercise the options until they vest, though, and that takes time. At EMC, options vest at 20% per year, so they don't fully vest until after 5 years. Other companies vest at different rates. It's important to note that stock options are given out on a case by case basis, so people who don't get them, be they employees or temps, can't sue for them.
What they're talking about here is different. It's something like our Employee Stock Purchase Program. The deal is that you can have a given portion of your paycheck (at EMC, upto 10% or $10,000) withheld, and at the end of each half, they buy stock with that money. Now what makes this such a great deal is the price at which they buy the stock. They take the price as of the first trading day of the half and the last trading day of the half. They then toss out the higher of the two prices. They then lop 15% off that price. They then buy stock for you at that price with all the money that you've had withheld. This can be very profitable--at least a 15% profit, even if the stock is crashing and you sell immediately. The important thing here is that this is a standard benefit for all employees, but not for temps, so the temps are saying that they should be considered employees, so they should have received this benefit. It's easy to calculate the exact cash value that they would have received had they participated in the program and sold immediately, so it's easy for them to say what the dammages should be.
Now back to the issue of whether they're employees or temps.
Settling with DOJ is likely to increase the price (Score:3)
of MS shares.
The market fears that the DOJ will force MS to breakup. A settlement (on almost any terms) would calm market fears of this.
Sure, a big fine, and DOJ monitoring might cause a bit of a drop short term, but I think that the Market is genrally hoping for something like that.
If MS can't settle with the DOJ, they might be in real trouble - their fate is out of their hands. The market trusts Bill Gates to turn a profit - they fear taking the control of MS away from him.
Thorny Issue (Score:3)
However, I remember all too well when I graduated from college in the late 80s when no jobs were to be had and all I could find was a job as a temp employee. Companies regularly hired people as these so-called temp to perm positions where they essentially hired you through a temp agency with the promise that youd be made a permanent employee after the trial period. The trial periods were regularly extended and extended without any appeal possible on the behalf of the worker. It got to the point where most of us had been working for a year or more for all intents and purposes as permanent employees, only we had no health insurance, no benefits, no nothing. Its a horrible position to be in, particularly if you arent making enough to save for the eventuality of being let go without warning.
I dont have enough information about the complaintents to really judge, but from what I understand these are not people who chose a free-wheeling high-income contractor lifestyle, these are people who have not had the option to be permanent employees extended to them.
Temp employees should be temp employees, and if youre using somebody like a permanent employee, they should be really legally hired (if they should so choose).
Re:Temp Employees Deserve This (Score:3)
It is a situation like that which provides abuse. By and large, I would say that these things happen to the inexperienced contractor, not to the long-termer who knows full well that working 3 months a year and travelling for 9 is the way to go, screw the stock options.
Temps are much more susceptible to abuse, though. I'm not sure if you know anybody who has done long-term temping work, but they are treated exactly as permanently employees. Less the benefits. Of course they can just walk out the door, but temps do receive pay rises and tend to be amongst the least skilled of the office workers. Want to start over for 3 bucks less an hour? If I recall my college days correctly, that's 15 packets of Mr. Noodles!
If a contractor leaves taking key corporate knowledge with him, and seeks vengeance for abuses, he's committing an illegal act. At least, under the terms of every contract I have on hand, I'm required to create and submit all project and process documentation at the end of my term, even if I am dismissed from the project or walk out after a few weeks.
Curiously, I also have a contract that absolutely requires me to wear a tie. But that is besides the point.
What is the difference between temporary and permanent employees? Temporary employees can be dismissed with less notice and less trouble. They're generally paid higher for this sacrifice, this is true. If a company shows that they have been hiring temps in place of permanent staff merely to glean this advantage, though (look at amazon.com), I think that is fundamentally wrong. True, there is no shortage of people willing to temp, but I think this is a violation of workers rights.
In every company I've worked for that has had a well-developed temporary staffing solution, you could subtract the temps and continue to maintain the status quo, at the very least during the slowest month of the year. Temps were always used when things were falling behind, or during a sudden rush.
Contractors are a bit different. I think that perhaps they should have known better, but that inexperienced people suddenly being offered $10-20k per quarter will grab it without questions, and then act exactly as a permanent employee does, doing the work of a permanent employee and having the long-term projections and assessments of a permanent employee. Suddenly, 3 years down the road, they realise that they've been shafted.
I'd like to say 'Too bad for them', but having been, early in my career, used and abused by an employer, I really can't. True, I left that job and trebled my salary. But then, I wonder just how many royalty payments I missed out on?
-l
Time on their side (Score:3)
This year 2000. That makes it almost 8 years.
The saying goes, Justice delayed, is jusice denied
How sadly true. The lengthy court procedures often help big corporations like Microsoft. By the time justice is served, the victim is dead, sometimes in the literal sense, sometimes in the figurative.
Laywer: Microsoft did *not* lose an appeal here (Score:4)
This generally gives *no* indication as to how the court would rule on the issue. Frequently, the court waits for conflicting opinions from differant appellate districts until it hears a topic.
For microsoft itself, it's the same result as losing--the lower court opinion stands. As for the future, however, keep in mind that the 9th district is the most frequently overrulled district in the country . . . (or at least it was last time I checked).
Temp Employees Deserve This (Score:4)
There are quite a few corporate entites which abuse temp status. Temps and contractors do not need to be supplied with benefits of any sort in most countries, and this results in mean ol' companies abusing the law. In Ireland, for instance, many companies hire employees to 11 month fixed contracts, at which point they are dismissed. This is because beyond 11 months, they become eligible for benefits. I've also seen companies over here where 'Temporary' employees hold a fair bit of seniority (1-2 years).
In my belief, Temps and Contractors shouldn't be eligible for benefits if they are brought in strictly as relief staff or additional manpower for a fixed, brief period of time. At Microsoft, however, this does not seem to be the case. They've abused the worker classification of those employees strictly to avoid health benefits, stock options and even, IIRC, a decent lunch.
So more power to the people pressing this suit. I think they're doing it for the right reasons -- they've done the work of permanents, held the term of permanents and all they've gotten in return is a sort of lofty disdain from proper (Salaried and optioned) Microsoft employees.
Another bit of blood on the nose of Microsoft, I suppose. Still, this is something that has been played out, though for basic rights like a minimum wage (not lucrative stock), for years in Big Industry.
For those of you who are wondering about the proper classifications of Temporary and Contractual employees:
Temporary: A temporary employee is one who is maintained on a rolling contract and paid a fixed wage based on time worked, generally schemed around hours. They often get the short end of the benefit stick, not even getting paid sick leave and having a rather paltry amount of holidays. Generally, temps will be provided by staffing agencies. Temporary staff are often abused by rolling their contracts for week after week, keeping them on as 'Temporary' employees despite having reached the point where they would carry seniority if they were a Permanent employee.
Contractor: A contractor is a bit different, as their pay scale can be done hourly, weekly, daily or project-based. They are employed on a fixed term contract, and their billing varies as much as their pay scales. The abuses to contractors occur in much the same way as those to temps. A contractor is employed for a specific project, then the project term is extended or he is transferred to another project team, and so he remains a contractor, although he is obviously acting outside of his original contracting brief. I've seen 'Contractors' with more say in a company than the director of IT, and yet they're still working off of their base terms as far as benefits go. And that means that if the company they helped create runs an IPO, they're not entitled to a bit of it.
As mentioned above, from what I can tell MS purposefully abused these designations in order to save a buck or two.
-l
Review the Definitions (Score:5)
I find it terribly interesting that people shout back and forth about "I'm an employee!", "I'm an independent contractor!" or some other such thing without the foggiest notion of what they *actually* are. In fact, the definition of employee and of independent contractor are matters of law. No contract that you can sign between yourself and someone who pays you money can change that. If the contract says you're an independent, if both parties agree you're an independent, if nearly everyone accepts that you're an independent BUT your individual circumstances meet the definition of an employee, then you ARE an employee. Period. You can sign contracts and make agreements to the contrary all day long and it doesn't matter one whit.
Different agencies at the federal, state, and local level work under different statutes. And yes, they are a mess, generally using vague language that may well result in someone being an employee to the Internal Revenue Service but an independent contractor to the Department of Labor. Or vice-versa. Most agencies, though, wind up falling back on the 20 common law factors used by the IRS or a variation thereof. (That situation is in flux right now, but the 20 common law factors still rule for tax purposes, even if the new kinder and gentler IRS is so gun-shy that they're not really enforcing them.) Take a look at them on IRS Form SS-8, Determination of Employee Work Status For Purposes of Federal Employment Taxes and Income Tax. [irs.gov]
Work through that form and you might be surprised. I think a lot of "independent contractors" will find that they are actually employees. And if they're employees, aren't they entitled to the benefits a company extends to employees?