Who runs the market?
Your CEDAH (Central Database of Available Hours) will probably fit the secure software-as-a-service model. It will be hosted remotely; sparing costs and upkeep of a stand-alone implementation. On day one you will be given a virgin market with one Superuser log-in. That person can register infinite back office users with different levels of access.
From that point on, back office users can:
- Approve intermediaries: These are the organizations who vet, insure and support employers/workers who they accept as customers. They charge their buyers and payroll their sellers, retaining a margin on each hour sold. Intermediaries might be commercial temp agencies, employment charities or public bodies. They can’t enter the market without back office approval.
- Oversee intermediaries: Back office access allows the user to see – and override if necessary – the activity of any intermediary. This is the norm for such systems. The market operator may wish to intervene if an intermediary is breaking their contract permitting use of the market.
- Set defaults: Default maximum/minimum; travel areas, periods of notice, session lengths and other personal choices for a worker can be updated anytime. There is rarely a legal aspect; just local judgement on how to best ensure new workers get a good flow of work without being plunged into brutal on-demand assignments if that is not their wish.
- Change system controls: Minimum wage settings and bands, maximum working hours, minimum breaks, age restricted hours and many other parameters can only be changed by back office users with the highest level of clearance.
So, who are the back office users? Options include:
- The local workforce system: Staff already shape their jobs market, usually within local political priorities. The same values/protections could simply be extended into ultra-flexible work with a small cadre of managers given back office log-ins and routines established for approving an intermediary or monitoring existing activity.
- A pro-workers organization: Unions run hiring halls, CEDAHs are a more granular 21st century version. Community development bodies often evolve sophisticated labor market support strategies transferable to granular work. We, Beyond Jobs, have experience of running UK markets with no ideological aim beyond growth and personalized opportunity for participants.
- Commercial operators: This may require a contract that stops any market manipulation to unfairly increase profitability.
Your market operators will decide, or be told, how the local market is to be shaped. Key issues are:
- Worker status: Are people selling their time in the system allowed to do so only as hour-by-hour employees of a temp agency (so called “W-2’s”). Or, will it also accommodate independent contractors (“1099’s”)? A CEDAH can lessen the isolation of independent contractors by ensuring they are affiliated with a chamber of commerce or other body providing protection/benefits.
- System wage floor: Compliance with minimum wage legislation on every booking is a given. But there may be a local Living Wage. Is that the floor? Balance needs to be found between boosting income and failure to compete with cash-in-hand bookings.
Who are the intermediaries?
Do intermediaries using the platform need to have been in business for at least 2 years? Must they have a particular licence? Membership of a credible trade body? Equilibrium needs to be found between: (a) ensuring stability for market participants (b) getting a vibrant, innovative, competitive field of bodies driving the market forwards.
Further issues may be decided in conjunction with intermediaries. These parameters are then inserted into the system’s default contracts. (Market operators contract with intermediaries, allowing them to use the system. Those agencies then contract with Buyers/workers using their own T&C’s or the CEDAH’s default agreement.)
Rule setting for beginners
Market operators’ power in setting rules is in proportion to the early demand lined up for local launch. If a city commits $20m of bookings over the first 12 months, that is a huge block of demand creating a mouth-watering business case for intermediaries. They can be pushed into accepting enhanced conditions for workers and lower mark-ups. If a launch is only just above minimum demand intermediaries will need a bigger slice of the pie to make participation worthwhile.
We recommend starting with very simple rules, knowing they can be fine-tuned later. For example, for the first year a city might only permit established local employment businesses to be intermediaries. Legal minimums are adopted with only temporary employee (W-2) status permitted for workers. But a determination to evolve to wider scope and enhanced worker conditions once critical mass is reached can be made clear.