MIT Sloan Management Review

Business Ethics and Public Policy, Human Resource Management and Industrial Relations

Old Laws Hobble the New Economy Workplace

By Peter Cappelli

January 15, 2001

Employment conditions have changed in almost every way but the way regulators see the issues. The old model is obsolete.

If we are living in the New Economy of the new millennium, why are U.S. labor laws mired in the New Deal of the 1930s? Employers are well aware that the anomalies exist and are increasing daily. It’s the legislators who are shirking the mind-boggling chore of modernization.

Two recent government rulings are illustrative: The National Labor Relations Board allowed employees of temporary-help agencies to organize into labor unions; the Department of Labor, although it eventually backed off, declared employers responsible for ensuring safe home offices for employees who work from home.

Many of the anomalies have their roots in the labor environment of Franklin D. Roosevelt’s presidency, but the workplace has changed a lot since then. Consider the following:

  • ▪ Today supervisors often have less job security, longer hours and sometimes even lower pay than the employees they supervise. The latter have many protections from employment law; the supervisors essentially have none.
  • ▪ Despite the evidence that employees benefit from improving their job-related skills, it is illegal for an employer to require that workers share the costs of training for their current jobs, even though employees may take their new skills to a different company soon after.
  • ▪ Getting experience, even from unpaid work, is a good way for recent graduates and other entrants to the workforce to get ahead. But it is illegal to have anyone... To read the complete article, login or sign-up using the form below.

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