Consider Legal and Ethical Issues

Legal Issues. There will likely be development and debate of new and current employment laws and
regulations, as well as increased emphasis on enforcing specific aspects of current laws and regulations
such as those related to immigrant employment.109 There are likely to be more challenges of sex and
race discrimination because of lack of access to training and development opportunities that are needed
for promotions to better-paying jobs or higher-level management positions. Eliminating discrimination
against veterans and people with disabilities, especially among federal contractors, is likely. This is
especially likely due to the expanded definition of disability under the Americans with Disabilities Act to
include cancer, diabetes, epilepsy, and intellectual disabilities.

As a result of the growing gig economy, more legal challenges related to whether workers are
misclassified as independent contractors rather than full-time employees (who are eligible for overtime
pay, unemployment, and worker’s compensation) are likely. Such a case was brought against ride-
sharing services Uber and Lyft in California and Massachusetts and settled out of court, but cases in
other states are likely.110 However, given the current political environment, it is also possible that
government regulations might loosen the distinction between full-time employment and independent
contractors, creating a middle ground that could, for example, allow companies to contribute to
employees’ health care costs without having to pay for overtime.

Universal health care coverage will continue to be debated in Congress. The plan they decide on will
affect the availability of health care for employees, the conditions and dependents that will be covered,
and out-of-pocket charges and employer costs. Regardless, in their efforts to reduce employee health
care insurance costs, companies will continue to offer incentives for employees to participate in
wellness programs and providing penalties if they do not. Wellness programs typically include smoking
cessation, exercise, dieting, and submitting to biometric screening tests (e.g., blood tests) to detect
illness or risk of illness such as heart attacks. However, wellness programs are coming under scrutiny.
The Equal Employment Opportunity Commission has issued preliminary rules about when the penalties
or rewards related to participating in wellness programs are too extreme and may violate the Americans
with Disabilities Act.

Under the Trump administration, immigration will come under increased scrutiny, to protect both
national security and American jobs. Scrutiny of companies that employ unlawful immigrants or abuse
laborers will face significant penalties. Companies can face criminal charges if immigration and customs
officials can show that they knowingly employed undocumented and illegal immigrants. The number of
company audits conducted by ICE has increased over the past several years, resulting in over $10 million
in fines.

The number of workers eligible to enter the United States under different visa programs may be
reconsidered, and employers may have to pay a fine or tariff for employing foreign workers. Bans on
immigration from countries suspected of harboring terrorists are possible. Legislation affecting
immigration will be fiercely debated because of its potential impact on business and the diversity of the
United Sates. For example, leaders in many companies, but especially those in technology industries
such as Apple, Microsoft, and Facebook, have been the most vocal to criticize legislation intended to
reduce the possibility of terrorist attacks by banning people from seven Muslim-majority countries (Iran,
Iraq, Libya, Somalia, Sudan, Syria, and Yemen) from entering the United States.111 Their criticisms are
based on their personal perspective, business needs, and business values. The leaders personally believe
that immigration has always played and will continue to play an important role in the United States.
Many businesses, even those not necessarily in the technology industry, need skilled foreign talent to fill
engineering roles, help design innovative products and Page 43services, and create new business start-
ups. Finally, most companies, such as Coca-Cola and Ford Motors, have core values that include respect
for all people and commitment to diversity and inclusion which run counter to the ban.

The publication of classified documents by WikiLeaks, Wall Street insider trading probes, and data
breaches of employee data have resulted in companies more carefully scrutinizing data-security
practices and increased concerns about protecting intellectual property. For example, a Boeing
employee who could not format a spreadsheet sent it to his spouse for help, causing a security breach
that could have exposed ID numbers, accounting codes, and Social Security numbers for 36,000
employees.112 Data-security concerns will likely influence HR practices related to performance
management such as the use of electronic monitoring and surveillance of knowledge workers. We may
see more litigation related to employee privacy rights and intellectual property rights as a result of
companies terminating employees or taking disciplinary action against them for data-security breaches,
discussing employment practices using social media, or sharing or stealing intellectual property for
personal gain. Also, issues regarding the confidentiality and security of employees’ health care
information will receive more attention as companies provide employees with wearables (such as
Fitbits) and apps as part of wellness initiatives to track what they eat and drink, their heart rate, and
physical activity. Employers who provide employees with wearables as part of wellness programs are
not allowed by health privacy laws to view any single employee’s health statistics.

Ethical Issues. Many organizations have engaged in serious ethical misconduct, including General Motors
(failure to fix and notify customers about faulty ignition switches), the U.S. Department of Veterans
Affairs (concealed patient wait times), the U.S. Secret Service (security breaches involving partying and
prostitutes), and Takata (installed faulty airbags). Many decisions related to managing human resources
are characterized by uncertainty. Ethics can be considered the fundamental principles of right and
wrong by which employees and companies interact.113 These principles should be considered in making
business decisions and interacting with clients and customers. Ethical, successful companies can be
characterized by four principles shown in Figure 1.7.114 First, in their relationships with customers,
vendors, and clients, these companies emphasize mutual benefits. Second, employees assume
responsibility for the actions of the company. Third, such companies have a sense of purpose or vision
that employees value and use in their day-to-day work. Finally, they emphasize fairness; that is, another
person’s interests count as much as their own. HR and business decisions should be ethical, but that is
not always the case. A recent survey of employees found that 41% had witnessed some form of
unethical conduct at their workplace.115 This probably helps explain public perception of business
ethics: 32% rated business executives’ honesty and ethics standards as low or very low.116 It is
important to note that ethics refers to behavior that is not clearly right or wrong. Compliance means
that the company is not violating legal regulations. But a company can be compliant and still have
employees engaging in unethical practices.