On a certain level, it’s fitting that President Obama keeps pounding new corporate compliance requirements onto government contractors. After all, rewriting the social contract is at the heart of all this, and many more revisions are coming.
The latest new clause came from Obama himself: On Labor Day, he announced that all government contractors will be required to offer paid sick leave starting in 2017. (Cynical applause to the president for proposing a socially popular but business-unfriendly rule that delivers its full bite only after he leaves office.) Expect Obama to start hectoring Congress for a national paid sick leave law as soon as everyone in Washington gets back to work this week.
The president’s words will fall on deaf ears, of course, but that is part of his long-term political strategy: portray his administration as trying to give working-class America breathing room to survive, and Republicans as a bunch of meanies. As political strategies go that’s a good one, because Republicans are the party more beholden to Big Business, and Big Business does look like a bunch of meanies.
This populist movement against Big Business (“populist” isn’t even quite the right word for it, since plenty of white-collar, upper-class professionals hate the basic direction of modern business too) is happening on multiple fronts. Just in the last two weeks we’ve seen the National Labor Relations Board dramatically expand the definition of joint employers, and a federal court grant class-action status to Uber drivers pressing a lawsuit that they be considered employees rather than independent contractors. The NLRB also eased the way for unionization earlier this summer, and a host of state and local efforts to address worker grievances are afoot across the country. Obama made his paid sick leave announcement in Massachusetts specifically because voters there adopted a paid sick leave law for all businesses last year.
This push will affect corporate compliance officers in a few ways. Obviously the first challenge will simply be compliance with all these new rules; the policy and contract implications alone will be hugely onerous for many companies. For example, the best bit of wisdom we have in our article about the NLRB and joint-employer status is to review all your contracts and dump any element of control over a joint relationship you don’t absolutely want, to minimize what I’ll call “joint employer risk.” It’s an excellent point, but good luck with the scenario-planning necessary for that task.
It’s tough to believe the CEO talking about a rigorous ethical culture where everyone is part of the same team, but oh by the way, we’re still opposed to giving you paid sick leave. Or a salary increase. Or parental leave for your newborn.
The deeper challenge, however, is how compliance officers navigate these battles over corporate culture—because that’s what they are, and as Corporate America tries to resist some of these measures, that will leave plenty of employees disenchanted and cynical about how much corporations really do care about them. It’s tough to believe the CEO talking about a rigorous ethical culture where everyone is part of the same team, but oh by the way, we’re still opposed to giving you paid sick leave. Or a salary increase. Or parental leave for your newborn.
All these issues are much more conflated than senior managers might think. The truth is that corporate ethics and corporate culture are intertwined; you can’t have business policies that are cheap, stingy, exacting, and dehumanizing without telegraphing to employees that the company doesn’t much care about them. And once they get that message, they don’t care much about the company in return—which is how you create a climate for bribes to be paid, abuses to happen, lies to be told.
In fairness, another truth is that many companies do try to be generous one individual at a time: people rallying to donate sick time to a coworker afflicted with cancer, or fund-raising to help someone whose home is destroyed by fire, or pinch-hitting a presentation when someone has a child in the hospital. It’s when we try to achieve those ends company-wide, through more generous policies (sick leave, parental leave, wage increases, and so forth) that senior leaders get cranky and the U.S. Chamber of Commerce starts threatening litigation.
Now the Obama Administration feels that it has the political wind at its back (because it does), so it is going to forge ahead with more worker-friendly policies that paint Corporate America in a difficult position: adopt them, or look like stingy jerks.
The implications are enough to make a compliance officer feel queasy. Let’s hope you have sick time.
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