Regular Employment Policy
The previous chapter made the distinction between regular employment and social employment. This chapter outlines the standards, rules, privileges and responsibilities associated with various aspects of regular employment. This is the regular employment policy. It has policy parameters that citizens have control over and use that control to fine-tune the working of this policy.
Each section in this chapter discusses numerous rules that apply to regular employment, employers who hire individuals as regular employees, and to these hired employees. Each section is a collection of rules in a single category of rules.
The category names and hence the section names are as follows:
- Basic Rules
- Work Hours
- Paid Time Off
- Unpaid Time Off
- Standard for Employment Wages
- Expected Duration of Employment
Basic Rules
Employment is a relationship between an employer and an employee. The employees provide employers with the use of a fixed amount of their time, work related knowledge and skills, and do the work in exchange for wages.
Employment policy applies to regular employment and also to all subcategories of regular employment. Some ways of categorizing are:
- Based on hours worked per week: full-time or part-time.
- Based on expected duration of employment: temporary or indefinite (also known as permanent).
- Based on how the wages are quoted: hourly rate or monthly salary or annual salary.
- Based on how frequently wages are paid: daily, weekly, bi-weekly, monthly.
Employers must abide by all laws, including that of Regular Employment Policy and Social Employment Policy. Employers must abide by all regulations that are applicable for their kind of business. Employees, being citizens, must be aware of employment related laws and must abide by them.
The kind of work and its wages are previously and mutually agreed upon and are at a fixed hourly or monthly or annual rate. Since the kind of work is previously agreed upon, the employer must have specific expectations of the knowledge and skills required to do the work and the employer must ascertain that the candidate for employment possesses that knowledge and skills.
As part of the employment relationship, an employee surrenders all fruits of the employment to the employer and in return the employer pays the employee the agreed upon wages at a predetermined frequency. That is, employers retain all fruits of the employment in exchange for wages. This implies that employers are owners of all the assets, physical or intellectual, produced by the employees as part of their work. This also implies that employers are responsible for every action of every employee that is part of the employee's employment. Thus, when an employee as part of the employment creates a work of art, it is owned by the employer. Similarly, when an employee as part of the employment commits a mistake that causes some harm or loss, the employer is responsible for that harm or loss.
Employers should hire and retain employees on the goodness of the kind of work that they have to offer, on the goodness of their workplace, on the goodness of their management of work and on the goodness of the rate at which they pay wages for the kind of work that they ask employees to perform. Ideally, employers should refrain from offering any other enticements.
Work Hours
A year has either 365 days or 366 days. There are 7 days in a week, and 50 weeks account for 350 days. That leaves either 15 or 16 days in each year. These 15 or 16 days are statutory holidays. Feb 29th is always a statutory holiday; because we got to celebrate a quirk in our calendar. The other 15 days can be distributed throughout the year as per the social custom. One should not consider statutory holidays as paid nonwork days. These are the days that are almost mandatory as nonwork days. Employers can ask their employees to work on statutory holidays, and employees can refuse to work on these days. Should an employee agree to work on statutory holidays, the employer should compensate such employees at a higher than their normal wage rate.
When people work full-time, they are expected to work 50 weeks. Notice that 50 is a nice round number. 1 week is 2 percent of a work year.
Each work week has 5 work days and 2 nonwork days. These weekly nonwork days can be chosen as per social custom. In a society, there can only be one such custom; employers are not free to choose the nonwork days either for their organization or for specific categories of employees or for specific employees. Note that the weekly nonwork days should not be considered as paid nonwork days. These are almost mandatory weekly nonwork days because humans need regular breaks from work. Employers can ask their employees to work on weekly nonwork days, and employees can refuse to work on these days. Should an employee agree to work on weekly nonwork days, the employer should compensate such employees at a higher than their normal wage rate.
Each work day is made up of either a single contiguous chunk of 8 hours or two chunks of 4 hours with a gap between them; this accommodates the two main work customs observed in most societies. Thus, each work week is 40 hours and 50 work weeks is 2000 hours. These 2000 hours merely represent the potential work hours per year. The actual number of work hours per year is lower by the amount of paid time off.
Within each work chunk, which is either 8 hours or 4 hours, there will be provision for breaks. Humans are not machines, and they need periodic breaks from work. The amount of time spent in such breaks is considered as part of the work. These provisions would usually be based on social customs. In an Ideal society, we would not have to make laws out of these social customs; but we will if we have to. Each employer may have their own custom or may adopt the generally accepted social custom. Whatever custom an employer adopts, the employer must openly declare it and that custom should apply to all employees working for that employer, whether they are direct employees of that employer or not. Thus, as far as breaks are concerned, contractors are subject to the employer for whom they work, not the employer who pays them.
A full-time employee works for about 40 hours per week; that is about 8 hours a day 5 days a week. A part-time employee is anyone who works less than 40 hours per week. How these work hours are split among the week days is up to the mutual agreement between the employer and employee.
There is no reason to mandate a specific number of hours that an employee must work. There is no reason to mandate a specific minimum or a specific maximum. If there was such a mandate, then it indicates a restriction of freedoms. With the presence of the Utopian Payment Model, working excessively long hours is unnecessary to satisfy one's needs. Thus, the past efforts of various societies in curbing the excesses in work hours is not necessary. We are setting up a system where we do not take away freedoms, and yet we desire to establish the acceptable standard of employment. Employment is a need, and it is desirable in order to satisfy one's wants. Citizens should be free to use their judgment to decide the optimal number of hours that they need and desire to work.
Thus, 50 work weeks per year, 8 hours per work day, 5 work days per week, and 2000 work hours per year is a measuring standard. It is not a working mandate. It does not indicate how much a regular employee should work. It does not indicate how much an employer can expect an employee to work.
Paid Time Off
Employment includes the concept of paid time off. Paid time off is a fixed number of days in a year that the employee does not have to work and yet gets paid for those days.
Paid time off is included within the 50 work weeks. Each society should decide how much paid time off they deserve and enact it as a law. Thus, citizens decide the amount of time-off in weeks; this is a policy parameter that citizens choose by consensus. For example, some nations may choose that 5 weeks is the amount of paid time off; some other nations may choose 3 weeks; and yet some other nations may choose 10 weeks; it is totally up to the citizens of the nation. Whatever is the chosen amount of paid time off, it is available to all employees; no discrimination for any reason. Note that when we say 5 weeks paid time off, it translates to 25 working days of paid time off. When we say paid time off, it is implied that it is paid by whoever is paying the salary.
Paid time off accrues in proportion to actual hours worked. Thus, if there are 5 weeks of paid time off, then there will be 45 work weeks in a year, and hence, 45 * 5 = 225 work days per year, and hence 225 * 8 = 1800 work hours per year. The paid time off accrues in the proportion of 5 weeks of paid time off per 45 weeks of actual work. Paid time off accrues in fractions of days per actual work day.
All existing notions of vacations, paid sick days, paid personal days, etc. are included in the idea of "paid time off". Utopian thought eliminates the segregation of paid time off. People can use their paid time off for whatever purposes they deem fit, and whenever they wish to. They do not need to obtain the employer's permission to take that time off. It is courteous to inform the employer of a planned time off. In utopia, we do not mandate that people be courteous; usually they will be.
Every year-end, employers must reimburse any unclaimed paid time off to the employee at the same rate of the salary. Paid time off cannot be carried forward. Paid time off cannot be forfeited. It must either be taken or it must be paid.
If the employer employee relationship terminates before the year-end, then the accrued paid time off must be paid by the employer to the employee at the same rate as the salary. There are no exceptions for any reason.
Unpaid Time Off
Every year, in addition to paid time off, employees can take any amount of unpaid time off for any reason. There is no approval required for unpaid time off. However, unpaid time off generally needs to be scheduled and employees should inform the employer of the unpaid time off sufficiently before the beginning of the time off. Thus, for a single day of unpaid time off, a few days of prior notification is sufficient. Similarly, for a week or two of unpaid time off, a week or two of prior notification is adequate. For an unpaid time off larger than that, at least two weeks of prior notification is courteous and sufficient. The prior notification would help the employer manage work when faced with unpaid time off by the employee.
By establishing any amount of unpaid time off for employees, we enable any employee to take an extended period of unpaid time off for any reason. These reasons could be anything including reasons like extended illness, taking care of family members, pregnancy, taking a break from work, sabbatical, extended vacation, etc. When an employee is having an extended period of unpaid time off and if that employee has below average wealth, that employee would not have to worry about paying for the essentials, as the Utopian Payment Model would provide the financial assistance in paying for those essentials to the extent that the help is needed.
Thus, unpaid time off and the Utopian Payment Model work in conjunction and replace all existing partially paid time offs. Currently, such partially paid time off is available for only a few employees and only for very specific reasons. While the current practice may seem to accommodate some needs, it is in fact discriminatory. It is discriminatory because those who do not get such a partially paid time off are the ones who are being denied the benefit. With the unpaid time off and the Utopian Payment Model, any employee can take unpaid time off for any reason; no discrimination.
Since the employer does not pay for the unpaid time off, the employer should not have an issue with retaining the employment position for the employee, especially if the employee is valuable to the employer. While an employee is taking unpaid time off, technically, the citizen is still a regular employee of that employer.
Standards for Employment Wages
Employment is not a barter system where skills and time are exchanged for something other than money. Employees offer their time and time is the unit of what they offer. The knowledge and skills that employees offer is implicit. Employers offer compensation to employees for their time, and this compensation must be in terms of money. That money must be stated either as an annual salary or as an hourly rate.
Society knows the annual GDP and the population. Using these two numbers, we can compute the per-person GDP. This per-person number includes children, working-age citizens and senior citizens. This number is the average economic activity on a per-person basis. Intuitively, this number represents the average annual salary for each citizen.
Regular employment wages can be anything that the employer and employee agree on. However, there is a minimum acceptable rate at which wages must be offered. This minimum acceptable rate is a specifically chosen percentage of the per-person GDP. Initially, this minimum acceptable percentage number is set to 25% of the per-person GDP. This percentage number is a policy parameter that can be changed collectively by the citizens.
minimum annual salary = (GDP / population) * 25 / 100
If the minimum wage rate is to be quoted as an hourly rate, then the computation should also factor in the annual standard work hours after accounting for the paid time off. Thus, if the paid time off is 5 weeks, then it amounts to 1800 work hours per year and hence the minimum hourly wage rate is:
minimum hourly wage rate = (GDP / population / 1800) * 25 / 100
When employers offer employment on an annual salary, then they must offer a salary that is equal to or greater than the minimum annual salary. When employers offer employment on hourly wage, then they must offer a wage that is equal to or greater than the minimum hourly wage rate.
When employment is offered on an hourly basis, then its remuneration must be quoted in terms of hourly basis and must be paid for the actual number of hours worked. Since the hourly rate must be based on standard work hours per year, there is no notion of paid time off.
When employment is offered on an annual salary basis, then the equivalent per hour rate is computed using 2000 as the divisor for the annual salary, because this annual salary includes paid time off.
equivalent hourly wage rate = annual salary / 2000
Employers must pay wages at a predetermined frequency which is the same for all employees of that employer. The choices are daily, weekly or monthly.
Wages are paid for the actual number of hours worked, plus hours of paid time off.
The society is interested in knowing the number of hours worked by regular employees on an annual basis. The average annual hours worked by regular employees is one of the metrics that citizens can use to set the various policy parameters for the society.
When an employer is paying an employee less than 10 times the national average hourly wages, then it cannot offer such employees any perks of significant monetary value. In this context, "significant" means more than 5% of the wages. That is, at least 95% of the compensation offered by employers to its employees must be in the form of wages, which should be quoted as hourly wages or annual salary.
This stipulation is to prevent a possibility that employers could misrepresent the value of perks and make those perks appear better than what they actually are. This stipulation enables employees and potential employees to compare two job offers as fairly as possible based on the rate of wages offered.
An organization operates for a purpose, for a reason; its employees help the organization fulfill that purpose and in return get paid the wages. In financial matters, there is nothing more to employment.
Wage payment must be made in full. The principle here is "pay me today for work done today". It is similar to the way we behave when we go to a grocery store and buy something and pay for it in full. When we go to a grocery store, the customers are the employers and the store is like our employee, doing the work of keeping the grocery shelves stocked with fresh groceries, and when we visit such a grocery store and pick something that we desire or need, we pay for it in full. Regular employment is similar. The work has been done by the employee, and the employer is obliged to pay for that work in full.
An employer cannot defer paying any part of the wages to its employees. This means that an organization cannot provide pensions. In an ideal society, taking care of one's retirement needs is the responsibility of the individual. Individuals should not depend on their employers for their retirement. Once the individual gets paid his or her wages, how the individual plans for his or her retirement is entirely up to the individual. The individual may choose to merely save some money, invest some money, or buy a financial product called "annuity".
Any employers who currently promise pensions would have money set aside for such matters. This present value of future pensions should be paid out to those employees who would eventually have gotten the pensions. This is a relatively simple calculation for the administrators of such plans. Any organization that currently promises pensions to its employees must start paying its employees an additional amount that is the monetary equivalent of the promised future pension.
Expected Duration of Employment
Employment has two perspectives. From an employer's perspective, employers are asking for help and are willing to pay money for getting it. Employers ask for help because they want to extract profit from the work that the employees can do for them. From an employee's perspective, the employee has time, talents, knowledge and skills and would like to put them to use and earn some money rather than doing nothing and gaining nothing. "Work for money" is a fair exchange, should be a fair exchange, and nothing more than a fair exchange.
Employment is a mutually agreeable relationship. Employers and employees cannot force each other into doing anything that they do not want to do. If the mutual agreement ceases to interest any one of the parties or if the mutual agreement does not seem to be honored, then there is no reason for either party to continue the relationship and either one of the parties can dissolve that relationship.
Freedoms cannot be sold away for any amount of money; selling them is a violation of the second axiom. Continuing the employer-employee relationship or discontinuing the relationship is freedom of choice. This freedom should be symmetrically available to both parties.
Society can curb freedoms when there are strong reasons for curbing them. Curbing freedoms is the last resort in dire situations. Regular employment is hardly a dire situation.
Currently, our society either takes a stance that is inconsistent with the ideas and understanding mentioned above or does some things that are not in the spirit of the above-mentioned ideas and understanding. Hence, there is a need to specify the things that can and cannot be done in the employment relationship.
Employers cannot prevent an employee from resigning from the employment, and employees should not expect continuation of the employment for any specific amount of time. Regular employment is indefinite in the sense that when it will end is unknown; however, it can end at any moment in time.
Employers cannot prevent an employee from taking up another regular employment simultaneously with the current employment. Individuals have only a limited amount of time and energy to do work. When citizens over-commit their time and energy to multiple employers, their work will suffer, and as a consequence, one of the employers may discontinue the employment.
Employers cannot prevent an employee from taking up employment with a competing employer. For example, it is perfectly fine for a citizen to work with one grocery store in the morning and a competing grocery store in the evening. For most kinds of work and employees, there are no doubts about the ethical goodness of working for competitors. However, some employers may have an objection to one of their employees working for a competitor. While the employer cannot prevent the employee from working for the competitor, the employer can choose to discontinue the employment of this particular employee if such an employment is of concern to the employer. We enable employers to detect such a situation by informing employers of official changes to employment of their employees, while they are employees.
Employees cannot insist on any other citizen being hired or not hired by the employer. Citizens may have strong desires to not work with some people and just like we enable employers to know when their employee takes up a competing employment, we enable employees to know when their employer hires other employees.
There is no permanent binding associated with the employment relationship. It is a mutually agreeable commitment that lasts for an indefinite amount of time. Who is employed by whom is public knowledge; it is neither confidential nor secret.
When employers discontinue the employment of some employee for any reason, then employers are not financially liable for any of the employee's future earnings from the discontinued employment. Similarly, an employee is not financially liable for resigning from work for any of the future work that he or she may have done for the employer.
When employers discontinue employment of an employee, any work that is in progress and hence incomplete will stay incomplete and that discontinued employee is not liable to complete it. Similarly, when an employee resigns an employment, any work that is in progress and hence incomplete will stay incomplete and the resigning employee is not liable to complete it.