Signature Assignment: Employment Classification and Discrimination

ETH/321

Employment Classification and Discrimination

In this report, we will discuss the elements of the different types of employment relationships and analyze the ethics of potentially discriminatory practices in the workplace using the following scenario as an example:

An employee is hired by Dream Massage to be a massage therapist. She is hired as an independent contractor and, therefore, receives no tax withholding or employment benefits. Dream Massage requires the employee to work a set schedule, provides her clients and all her massage products, and exercises complete control over how she does her work. In addition, when the employee shows up to work the first day, she is informed by her employer she cannot wear her hijab as it violates the company’s dress policy.

Employment Classification

People who perform services for a company can be classified into two categories: employees or independent contractors. Common-law rules state that anyone who performs services for a company who controls what work is to be performed and how it is to be performed is classified as an employee . An independent contractor is a person who performs work for a company, or the general public, but remain free to perform the work without restrictions from the employer .

Using the definitions from the IRS, we can classify the employee at Dream Massage (we will call her Sonia, for simplicity’s sake) as a common-law employee. Sonia falls under the category of common-law employee because her employer maintains control of the work performed. Dream Massage requires Sonia to work a set schedule, provides her clients and massage supplies, and exercises complete control over how Sonia completes her work.

While many employers misclassify their employees by mistake, there are also several motives that would make an employer intentionally misclassify an employee. As an independent contractor, Sonia receives no employment benefits, which saves the employer a significant amount of money. By hiring Sonia as an independent contractor, Dream Massage is also exempt from paying Social Security taxes, Medicare taxes, and unemployment insurance. By misclassifying an employee as an independent contractor, a company can save anywhere from 20 to 40 percent of labor costs .

Employment Discrimination

Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers from discriminating against employees based on sex, race, color, national origin, and religion . Dream Massage has violated Title VII by requiring Sonia to remove her hijab as a condition of employment.

Title VII of the Civil Rights Act of 1964 states an employer must accommodate employees’ sincere religious beliefs and practices unless doing so would create undue hardship for the employer . Because allowing Sonia to wear her hijab would not interfere with her ability to perform her job, Dream Massage cannot legally require her to remove it as a term of employment.

Ethical Considerations

Having a rigid dress-code has several ethical implications for employers. There are very few circumstances in which wearing religious garb, such as the hijab, would constitute undue hardship – thus most employers are required to accommodate such requests. Because a massage therapist does not work in a hazardous environment and the hijab does not pose a threat to employee or client safety, Dream Massage is required to allow Sonia to wear her hijab at work. In addition to potential discrimination, a rigid-dress code can be considered unethical because it does not allow an employee the freedom to express their personal, moral, or religious beliefs. For an example outside of religion, it would be unethical to require a vegan employee to wear leather safety equipment because of their personal and ethical beliefs.

Conclusion

Dream Massage has misclassified Sonia as an independent contractor when she is really a common-law employee. Although doing so has likely saved Dream Massage money, it is unethical because it can be considered a form of tax evasion, and it harms Sonia by excluding her from employment benefits, such as health insurance or paid time off. In addition, Dream Massage has also violated Title VII of the Civil Rights Act of 1964 by refusing to make a reasonable accommodation to allow Sonia to wear her hijab at work.