Sunday, November 1, 2015

Management is not as Easy as it May Look

Grading can be subjective. Every student knows this, and has likely experienced some feeling of injustice from subjectivity at some stage of the academic career. This is because performance can be subject to perceptions and perspectives. We see the same instances in the working world, and our country generally. News items that excite and inspire some are seen as utterly irrelevant by others. Perspective has its effects.

I was surprised to see a recent story on WorkCompCentral about misclassification. Earlier this year, I tried to outline misclassification for those who had not heard of it in Misclassification - what is it? Many agree that misclassification is a problem. There are implications for unemployment, payroll taxes, competitive bidding, and yes for workers' compensation. It is a topic that is getting attention in a variety of jurisdictions. Some would argue that it deserves more attention than it is getting. 

Misclassification is essentially a problem of labelling a worker "independent contractor" rather than "employee." Doing so may keep a businesses' number of employees less than four and thus it is not subject to mandatory workers' compensation. Or, it may be done simply to keep the number of employees artificially low and thereby minimize the total payroll upon which workers' compensation premiums are paid. 

Several states are working on misclassification. Florida is among these. There have been many schemes reported in Florida news. These can be quite simple in some instances and fairly simple in others. It makes sense that there is some focus, because this misclassification is reportedly very expensive. 

The recent WorkCompCentral story details the efforts Vermont has made to address misclassification. Some might say rather that it documents what Vermont has not done, but then we are back to semantics. 

An audit was performed regarding Vermont's efforts at combating misclassification. It seems to have started three years ago with a gubernatorial task force tasked in 2012 to "develop an outreach campaign to educate employers on appropriate classification." That group elected not to "meet for two years." That is not unheard of. There have been a variety of boards and commissions across the country that did not meet at various times. 

Vermont is not a large state. It is about 157 miles north to south, and between 42 and 90 miles wide (widest at the Canadian border). North to South, that is about the distance from Melbourne to Ft. Lauderdale. The population is about 626,562, or about the same population as Lee county (Ft. Myers, FL). 

The Vermont Department of Labor (DOL) was audited, an effort to measure performance. Not only had the outreach group failed to meet for two years, the documentation of DOL's efforts was curious. The auditor concluded:

Multiple investigations started four years ago remain open.

Over 100 "active" investigations remain "assigned to investigators who are no longer employed."

DOL has imposed penalties on several employers, "but was unable to determine whether the penalties were collected."

The "rules relating to penalties for avoiding premiums" was last updated in 2001. 

The "program's single investigatory had 73 investigations assigned to him, some of them dating back to 2011."

The audit was also critical of the database used by DOL, as well as the quality of the data that has been recorded therein. 

The question now will be what Vermont does with the data. It must determine whether it considers this performance worthy. It must decide if misclassification presents a pressing problem for Vermont's workers and their compensation system. Finally it will have to decide whether to disband what appears to be an inefficient and ineffective misclassification enforcement effort. One might conclude from the findings above that no one has been paying much attention thus far. 

I walked into a similar situation in Pensacola, Florida back in 2001. I cannot believe that I have been sitting here for the last 14 years (this month). As an aside, I have now been a judge longer than I have held any of the other 26 jobs I have held. But accountability is not something at which the OJCC excelled in 2001. This agency had a history of long time-lines, bureaucracy, and inefficiency. 

There were two challenges, with which it appears Vermont is now likewise struggling. How to obtain data, and what to do with that data. The OJCC mastered both, but it was not an overnight result. The OJCC Annual Report will publish this month, with 254 pages of collective and individual data on the status of the OJCC. When I say it is a monumental task, it is no understatement. It is the answer to the question of what to do with the data. 

The process that supports that report each year is a strong database, with consistent data inputs in the field. Those inputs result in comparable outputs. The report, any data, should not be looked upon as a measure of results. The data should be looked at as a measure, about which one might ask questions. 

Two examples are worth noting. The OJCC provided judges with a database report back in 2007. It allowed a judge to print a report of every case that reflected an "open" petition in the database, with a filing date more than 210 days in the past. Did this produce a list of cases that should trouble a judge? No, the point of this list is not that these cases are past the statutory 210 days; the point is that with this list someone knows they are past the 210 days and can review to assure we are satisfied that there is a reason. 

About the same time, the OJCC provided the judges with a report that produced a list of all cases that reflected a status of "open" but which had seen no filing or scheduling activity for one year. Again, this does not produce a list of cases that should not be open. This produces a list of cases that someone should look at. That they are open is not the point. That there is or is not a reason for them to be open is the point. 

Vermont likely needs to re-examine the need for a task force. If it is needed, it should meet. The answer to the data is simpler. The inbound reports of problems need to be tracked, manually or electronically. If it is more than current staffing allows, then someone needs to say so. If the problem is important enough to attract focus, and it appears that it is, then leadership, process, focus, and evaluation have to be part of the plan to both track what is being done and to address the misclassification concerns. 









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