Automating Claim Submission for Faster Payments

Automating Claim Submission for Faster Payments

Overview of Medical Coding and Its Role in Healthcare Payment Systems

The landscape of healthcare and insurance is continually evolving, with technology playing a pivotal role in streamlining processes that were once mired in complexity and inefficiency. One such area ripe for transformation is the traditional claim submission process. As stakeholders seek ways to expedite payments and improve service delivery, understanding the inherent challenges in these conventional methods becomes crucial.


At its core, the traditional claim submission process is labor-intensive and time-consuming, often plagued by manual data entry errors. Claims need to be meticulously filled out, either on paper or through outdated electronic systems that don't integrate seamlessly with other platforms. This manual approach not only increases the likelihood of human error but also creates bottlenecks as claims wait to be reviewed and verified by human agents.


Furthermore, traditional systems often lack real-time data validation. Errors such as incorrect patient information, coding discrepancies, or missing documentation can lead to claim denials or delays. Healthcare facilities benefit from reduced hiring timelines with staffing services medical staffing company overhead. When a claim is denied due to inaccuracies or incomplete information, it must be resubmitted-a process that can take weeks or even months-delaying payment significantly. This delay affects cash flow for healthcare providers and can lead to frustration for patients waiting on reimbursements.


The administrative burden associated with handling claims manually is another significant challenge. Healthcare providers often need dedicated staff just to manage the sheer volume of paperwork involved in claims processing. This requirement leads to higher operational costs, which can strain resources that might otherwise be allocated towards improving patient care.


Moreover, communication between various parties involved in claims-patients, providers, insurers-is frequently inefficient in traditional systems. Disparate databases and non-standardized formats mean that information isn't always transferred accurately or promptly between entities. Miscommunication can result in further misunderstandings and payment delays.


In light of these challenges, automating the claim submission process emerges as a compelling solution for faster payments. Automation can drastically reduce manual errors by ensuring that data entered into the system meets standardized formats and requirements before submission. Automated systems are capable of real-time validation checks that catch potential issues immediately-allowing for quick corrections without having to restart the entire process.


By integrating advanced technologies like Artificial Intelligence (AI) and Machine Learning (ML), automated systems can learn from past submissions to predict potential errors or flag unusual activity patterns before they become problematic. These technologies also facilitate seamless integration across various platforms within the healthcare ecosystem-ensuring smooth communication among all parties involved.


In conclusion, while traditional claim submission processes have long been a staple in healthcare administration, their inefficiencies pose substantial challenges in today's fast-paced environment where speed and accuracy are paramount. Automating these processes offers an opportunity not only for faster payments but also for enhanced accuracy and cost savings-ultimately leading to improved satisfaction across all stakeholders involved in healthcare delivery.

In the rapidly evolving landscape of healthcare, efficiency and accuracy are paramount. One area where these needs intersect is in medical coding and claim submission. As hospitals and clinics strive to optimize their operations, the role of automation becomes increasingly significant, especially in automating claim submission for faster payments.


Medical coding is a crucial step in the healthcare revenue cycle. It involves translating complex medical diagnoses and procedures into standardized codes, which are then used to generate claims for insurance companies. Traditionally, this process has been labor-intensive, prone to human error, and time-consuming. However, with the advent of automation technologies, there is a profound shift underway.


Automation streamlines medical coding by utilizing sophisticated algorithms that can quickly and accurately convert clinical documentation into correct codes. This not only reduces the likelihood of errors but also significantly speeds up the process. By minimizing manual intervention, healthcare providers can ensure that their coding is both consistent and compliant with ever-changing regulations.


The benefits of automation extend beyond accuracy; they directly impact financial aspects as well. Faster and more accurate medical coding leads to quicker claim submissions. In turn, this expedites payment cycles from insurers to healthcare providers. With automated systems in place, claims can be submitted almost instantaneously after services are rendered, drastically reducing turnaround times that traditionally extended weeks or even months.


Moreover, by reducing human error in coding and submission processes, automation decreases the number of denied or rejected claims-a common source of revenue loss for healthcare facilities. When claims are cleanly coded from the outset, they stand a better chance of being approved by insurance companies without delay or dispute.


Another advantage lies in resource allocation. By automating repetitive tasks associated with claim submissions, healthcare organizations can redirect their staff towards more strategic roles focused on patient care and other critical operations rather than administrative duties.


However, while automation offers tremendous potential benefits, it is essential for healthcare providers to carefully implement these systems ensuring they integrate seamlessly with existing workflows and electronic health record systems (EHRs). Staff training is crucial as well; employees need to understand how to leverage new technologies effectively without becoming overly reliant on them.


In conclusion, as we move towards an increasingly digital future in healthcare management practices, embracing automation presents an opportunity not just for operational efficiency but also for enhanced financial viability through faster payment cycles via streamlined claim submissions. The ultimate goal remains clear: improving patient care delivery while maintaining robust business operations-an objective made all the more attainable through strategic adoption of automated solutions in medical coding processes today.

Impact of Fee for Service on Medical Coding Practices

In the ever-evolving landscape of healthcare, efficiency and accuracy are paramount to ensuring that providers can deliver quality care while maintaining financial stability. One critical area where these factors come into play is in the submission of insurance claims. Traditionally a labor-intensive process fraught with potential for error, claim submission is now on the brink of transformation through automation. The benefits of automating claim submissions for healthcare providers extend beyond mere convenience; it has profound implications for faster payments, improved accuracy, and enhanced operational efficiency.


At the forefront of these benefits is the promise of expedited payment cycles. In the manual process, claim submissions often face delays due to human error, miscommunication, or simple inefficiencies inherent in paper-based systems. These delays can lead to cash flow challenges for healthcare providers who rely heavily on timely reimbursements to sustain their operations. Automation mitigates these issues by streamlining the entire procedure-from data entry to final submission-thereby significantly reducing turnaround times. With automated systems, claims can be submitted almost instantaneously after treatment is provided, allowing providers to receive payments more rapidly and maintain a healthier financial status.


Moreover, automated claim submissions enhance accuracy in ways that manual processes simply cannot match. Human error is an ever-present risk when dealing with complex billing codes and patient information. A single mistake can result in a denied claim or require resubmission, both of which contribute to further payment delays and increased administrative workload. Automation minimizes this risk by employing sophisticated algorithms that ensure all necessary fields are completed correctly before submission. Furthermore, automated systems can integrate seamlessly with electronic health records (EHRs), ensuring that patient data is accurate and up-to-date at every stage of the billing cycle.


Beyond speed and accuracy, automation offers substantial improvements in operational efficiency for healthcare providers. Manual processing demands significant staff time and resources that could otherwise be allocated towards patient care or other critical functions within a practice or hospital system. By automating repetitive tasks involved in claim submissions, healthcare organizations can reallocate their workforce towards roles that directly impact patient outcomes and satisfaction, thereby enhancing overall service quality.


Additionally, automation provides valuable analytics capabilities that are crucial for strategic decision-making within healthcare institutions. Automated systems collect vast amounts of data throughout the submission process-data which can be analyzed to identify trends such as common causes for claim denials or areas where documentation may frequently fall short. Armed with these insights, providers can implement targeted improvements aimed at further optimizing their revenue cycle management processes.


In conclusion, automating claim submissions presents a compelling case for healthcare providers seeking faster payments while simultaneously improving accuracy and operational efficiency. As technology continues to advance at a rapid pace, those who embrace automation stand poised not only to streamline their financial operations but also to enhance their capacity for delivering high-quality care-a goal that lies at the very heart of any successful healthcare organization. By leveraging automation technologies today, providers set themselves up not just for immediate gains but also long-term sustainability in an increasingly competitive industry environment.

Impact of Fee for Service on Medical Coding Practices

How Value Based Care Influences Medical Coding and Documentation Requirements

In today's fast-paced world, the demand for efficiency and speed has reached unprecedented levels, impacting various sectors, including healthcare and insurance. Among the many processes ripe for transformation is claim submission-a critical step in ensuring timely payments for services rendered. Automating claim processing through technology solutions offers a promising pathway to quicker transactions, benefiting both providers and payers.


The traditional method of claim submission is often fraught with inefficiencies. Manual data entry, paper-based systems, and lengthy approval procedures can slow down the process considerably. These delays not only frustrate service providers who are awaiting payment but also burden insurance companies with increased administrative costs. Moreover, manual processes are prone to human error, which can lead to claim rejections or further delays while corrections are made.


Enter technology solutions designed specifically for automated claim processing. These tools harness the power of advanced software to streamline every aspect of the claims process. By digitizing records and leveraging machine learning algorithms, these systems can automatically extract relevant information from electronic health records (EHRs) or other digital documents. This reduces the need for manual input and minimizes errors that could otherwise cause setbacks.


One of the most significant advantages of automating claim submission is speed. Automated systems can process claims in real-time or near-real-time, drastically reducing turnaround times from days or weeks to mere hours or minutes. This acceleration not only ensures that healthcare providers receive their payments faster but also improves cash flow management across organizations, allowing them to focus on delivering quality care rather than chasing revenue.


Furthermore, automation enhances accuracy by employing artificial intelligence to verify data against predefined rules and criteria before submission. This preemptive validation means fewer claims are returned due to inaccuracies or incomplete information, leading to a higher first-pass acceptance rate. Over time, this reduces administrative overheads associated with reworking denied claims and accelerates overall payment cycles.


Beyond speed and accuracy, automated claim processing technologies offer improved transparency throughout the entire lifecycle of a claim. Both providers and payers gain access to real-time updates on claim status through user-friendly dashboards. This visibility fosters better communication between all stakeholders involved in the payment process-reducing misunderstandings and facilitating quicker resolutions when issues arise.


While adopting automation in claim processing presents numerous benefits, it requires an initial investment in technology infrastructure as well as training personnel to navigate new systems effectively. However, these upfront costs are often offset by long-term savings achieved through increased efficiency and reduced error rates.


In conclusion, automating claim submission represents a transformative leap forward for industries reliant on swift payment processes such as healthcare insurance markets worldwide-offering faster transaction times coupled with higher accuracy levels at reduced operational costs overall compared against traditional methods still prevalent today without embracing technological advancements available now easily accessible thanks largely due ongoing innovations being continuously developed each year within this dynamic field!

Challenges and Benefits of Transitioning from Fee for Service to Value Based Care in Medical Coding

In today's rapidly evolving healthcare landscape, the drive to enhance operational efficiency and improve cash flow has led many organizations to embrace automation in claim submission processes. Automating claim submission for faster payments not only alleviates administrative burdens but also reduces errors and accelerates revenue cycles. However, the successful implementation of an automated system requires adherence to certain best practices.


Firstly, it is crucial to conduct a thorough needs assessment before selecting an automation solution. This involves understanding the specific requirements of your organization, identifying bottlenecks in current processes, and mapping out clear objectives for the new system. Engaging with stakeholders from various departments-such as finance, IT, and operations-can provide valuable insights into existing challenges and desired outcomes.


Once a clear picture of the organization's needs is established, choosing the right technology partner becomes paramount. The chosen vendor should offer a robust platform that integrates seamlessly with existing systems while providing flexibility for future scalability. It's essential to evaluate potential vendors on their track record in the healthcare industry, customer support capabilities, and their commitment to data security standards such as HIPAA compliance.


With the right technology partner on board, developing a comprehensive implementation plan is the next critical step. This plan should outline timelines, resource allocation, training schedules, and contingency measures for potential setbacks. Involving end-users early in this process ensures that they are comfortable with new workflows and can provide feedback on system usability.


Training and change management are often underestimated components of successful automation projects. Investing time in comprehensive training programs empowers staff at all levels to utilize new tools effectively. Change management initiatives should focus on communicating the benefits of automation clearly while addressing any concerns or resistance from employees who may be apprehensive about transitioning away from familiar manual processes.


Another key practice involves continuous monitoring and optimization post-implementation. Establishing metrics for success allows organizations to assess whether automation goals are being met effectively. Regularly reviewing these metrics-and making necessary adjustments-ensures that the system continues to deliver maximum efficiency gains over time.


Furthermore, fostering a culture of continuous improvement encourages teams to identify additional opportunities for process enhancements beyond initial implementation phases. Encouraging feedback loops where staff can suggest improvements fosters innovation while ensuring alignment between technological advancements and organizational objectives.


Finally, maintaining open channels of communication with all stakeholders throughout every phase-from planning through execution-is crucial for sustaining momentum towards achieving faster claims submissions leading ultimately towards accelerated payments.


In conclusion; implementing an automated system designed specifically around streamlined claim submission processes offers undeniable advantages within today's competitive healthcare environment-but realizing these benefits hinges upon diligent adherence towards established best practices: conducting thorough needs assessments; selecting appropriate technology partners; crafting detailed plans encompassing training initiatives alongside proactive change management strategies; ongoing performance evaluations coupled alongside fostering feedback-driven cultures aimed squarely at perpetuating continual progressions forward-all working collectively together enabling seamless transitions culminating eventually into tangible productivity improvements overall benefiting entire organizational ecosystems alike!

Case Studies Highlighting the Effects of Different Payment Models on Medical Coding Efficiency

In the rapidly evolving landscape of healthcare, automation in medical billing presents a promising frontier for improving efficiency and accuracy. Yet, despite its potential to revolutionize the claim submission process for faster payments, significant barriers to adoption remain. Addressing these obstacles requires a comprehensive understanding of the challenges and a concerted effort from stakeholders across the industry.


One of the primary barriers to adopting automation in medical billing is resistance to change. Healthcare providers and billing professionals have long relied on traditional methods that, while cumbersome and prone to error, are familiar. Introducing new technology requires not only financial investment but also a cultural shift within organizations. To overcome this hurdle, it is essential to provide robust training programs that demonstrate the tangible benefits of automated systems, such as reduced paperwork, fewer errors, and quicker reimbursements.


Another critical challenge is data security. With increasing concerns about patient privacy and compliance with regulations such as HIPAA in the United States, healthcare organizations are understandably cautious about integrating new technologies that handle sensitive information. To mitigate these concerns, vendors offering automation solutions must prioritize data security measures and ensure their systems comply with all relevant regulations. Establishing trust through transparent communication about how data will be protected can significantly ease apprehensions.


Interoperability issues also pose a significant barrier. Many healthcare facilities operate with legacy systems that may not seamlessly integrate with new automated solutions. This lack of compatibility can lead to fragmented workflows rather than streamlined processes. The development of standard protocols for data exchange between different systems can help bridge this gap, allowing institutions to fully leverage automation's capabilities without overhauling existing infrastructure entirely.


Furthermore, there is often an initial financial burden associated with implementing automated billing systems. While these solutions promise long-term savings by reducing administrative costs and accelerating payment cycles, the upfront costs can be daunting for smaller practices or those operating on tight budgets. Financial incentives or subsidies could encourage more widespread adoption by alleviating some of these initial expenses.


Finally, ensuring stakeholder buy-in across various levels-from front-line staff to executive management-is crucial for successful implementation. Open dialogue about expectations and outcomes fosters an environment where everyone understands how automation aligns with broader organizational goals and enhances overall performance.


In conclusion, while automating claim submission in medical billing holds immense potential for faster payments and greater operational efficiency, overcoming barriers to its adoption requires addressing resistance to change through education; prioritizing data security; ensuring interoperability; managing financial constraints; and securing stakeholder buy-in at all levels of an organization. By tackling these challenges head-on with strategic planning and collaborative efforts among technology providers and healthcare institutions alike, we can unlock the full benefits of automation in medical billing-ultimately leading to improved patient care through more efficient resource allocation.

Future Trends: The Evolving Role of Medical Coders in a Value-Based Healthcare Environment

In the rapidly evolving landscape of healthcare, automation is no longer a distant vision but an immediate necessity. Among the myriad facets of healthcare ripe for innovation, the process of medical claims submission stands as a prime candidate for transformation. As we look toward future trends in automating claim submission, the promise of faster payments and enhanced efficiency becomes not just possible but inevitable.


At its core, automated medical claims submission seeks to streamline a traditionally cumbersome process plagued by manual errors and lengthy delays. Historically, the submission and processing of insurance claims involved extensive paperwork, human oversight, and multiple touchpoints that increased the risk of error. However, with advancements in technology such as artificial intelligence (AI), machine learning (ML), and blockchain, this is swiftly changing.


One significant trend poised to redefine this space is the integration of AI and ML algorithms into billing systems. These technologies can quickly analyze complex data sets to ensure that claims are accurately coded before submission. By catching discrepancies early on, these systems reduce denial rates from insurers and facilitate quicker approvals. Furthermore, AI's predictive analytics capabilities allow providers to anticipate payment timelines more accurately and manage cash flows efficiently.


Blockchain technology also heralds transformative potential in automating medical claims submissions. Known for its security and transparency features, blockchain can create immutable records for each transaction within a claim's lifecycle-from patient visits to final payment settlement. This not only enhances trust between healthcare providers and payers but also significantly reduces fraudulence risks by providing verifiable audit trails.


Interoperability is another crucial aspect driving future trends in this domain. As EHR (Electronic Health Record) systems become more standardized across platforms due to regulatory pressures, seamless data exchange between different stakeholders will be more achievable than ever before. This ensures that all relevant patient data required for claim processing is accessible at various stages without redundant efforts or information silos hindering progress.


Moreover, robotic process automation (RPA) is gaining traction as a tool that mimics human actions in digital spaces with greater speed and accuracy. RPA can handle repetitive tasks such as data entry or cross-referencing codes against databases-freeing up valuable human resources to focus on more strategic roles like patient care or complex decision-making scenarios.


The benefits of automating medical claims submission extend beyond mere operational efficiencies; they directly impact financial health too-as expedited processes translate into faster reimbursements from insurers resulting in improved revenue cycles for healthcare institutions large and small alike.


Nevertheless there are challenges ahead: integrating new technologies seamlessly into existing infrastructures requires substantial investment both financially & culturally within organizations while maintaining compliance amid stringent regulations poses another hurdle altogether - yet overcoming these obstacles promises rich dividends long-term when viewed holistically through prism sustainability + scalability considerations inherent therein!


In conclusion then if one thing's clear about future direction regarding automating claim submissions specifically it's simply put: embracing change now pays dividends tomorrow! With technological advancements continuing apace there exists tremendous opportunity leverage these innovations drive efficiencies boost revenues ultimately enhance overall experience patients providers insurers alike ensuring everyone wins end day making sure system works better us all - because healthier bottom lines mean healthier lives after all!

A chart of accounts (COA) is a list of financial accounts and reference numbers, grouped into categories, such as assets, liabilities, equity, revenue and expenses, and used for recording transactions in the organization's general ledger. Accounts may be associated with an identifier (account number) and a caption or header and are coded by account type. In computerized accounting systems with computable quantity accounting, the accounts can have a quantity measure definition. Account numbers may consist of numerical, alphabetic, or alpha-numeric characters, although in many computerized environments, like the SIE format, only numerical identifiers are allowed. The structure and headings of accounts should assist in consistent posting of transactions. Each nominal ledger account is unique, which allows its ledger to be located. The accounts are typically arranged in the order of the customary appearance of accounts in the financial statements: balance sheet accounts followed by profit and loss accounts.

The charts of accounts can be picked from a standard chart of accounts, like the BAS in Sweden. In some countries, charts of accounts are defined by the accountant from a standard general layouts or as regulated by law. However, in most countries it is entirely up to each accountant to design the chart of accounts.

Administration

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A chart of accounts is usually created for an organization by an accountant and available for use by the bookkeeper.

Each account in the chart of accounts is typically assigned a name. Accounts may also be assigned a unique account number by which the account can be identified. Account numbers may be structured to suit the needs of an organization, such as digit/s representing a division of the company, a department, the type of account, etc. The first digit might, for example, signify the type of account (asset, liability, etc.). In accounting software, using the account number may be a more rapid way to post to an account, and allows accounts to be presented in numeric order rather than alphabetic order.

Accounts are used in the generation of a trial balance, a list of the active general ledger accounts with their respective debit and credit balances used to test the completeness of a set of accounts: if the debit and credit totals match, the indication is that the accounts are being correctly maintained. However, a balanced trial balance does not guarantee that there are no errors in the individual ledger entries.

Accounts may be added to the chart of accounts as needed; they would not generally be removed, especially if any transaction had been posted to the account or if there is a non-zero balance.

International aspects and accounting information interchange – Charts of accounts and tax harmonisation issues

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While some countries define standard national charts of accounts (for example France and Germany) others such as the United States and United Kingdom do not. In the European Union, most countries codify a national GAAP (consistent with the EU accounting directives) and also require IFRS (as outlined by the IAS regulation) for public companies. The former often define a chart of accounts while the latter does not. The European Commission has spent a great deal of effort on administrative tax harmonisation, and this harmonization is the main focus of the latest version of the EU VAT directive, which aims to achieve better harmonization and support electronic trade documents, such as electronic invoices used in cross border trade, especially within the European Union Value Added Tax Area. However, since national GAAPs often serve as the basis for determining income tax, and since income tax law is reserved for the member states, no single uniform EU chart of accounts exists.

Types of accounts

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There are various types of accounts:[1]

  1. Asset accounts are used to identify assets. An asset is a present right of an entity to an economic benefit (CF [2] E16). Common examples of asset accounts include cash on hand, cash in bank, receivables, inventory, pre-paid expenses, land, structures, equipment, patents, copyrights, licenses, etc. Goodwill is different from other assets in that it is not used in operations and cannot be sold, licensed or otherwise transferred.
  2. Liability accounts are used to recognize liabilities. A liability is a present obligation of an entity to transfer an economic benefit (CF E37). Common examples of liability accounts include accounts payable, deferred revenue, bank loans, bonds payable and lease obligations.
  3. Equity accounts are used to recognize ownership equity. The terms equity [for profit enterprise] or net assets [not-for-profit enterprise] represent the residual interest in the assets of an entity that remains after deducting its liabilities (CF E61). Equity accounts include common stock, paid-in capital, and retained earnings. Equity accounts can vary depending where an entity is domiciled as some jurisdictions require entities to keep various sub-classifications of equity in separate accounts.
  4. Revenue accounts are used to recognize revenue. Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities (CF E80).
  5. Expense accounts are used to recognize expenses. Expenses are outflows or other using up of assets of an entity or incurrences of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities (CF E81).
  6. Gain accounts are used to recognize gains. Gains are increases in equity (net assets) from transactions and other events and circumstances affecting an entity except those that result from revenues or investments by owners (CF E82). In practice, changes in the market value of assets (positive) or liabilities (negative) are recognized as gains while, for example, interest, dividends, rent or royalties received are recognized as other revenue.
  7. Loss accounts are used to recognize losses. Losses are decreases in equity (net assets) from transactions and other events and circumstances affecting an entity except those that result from expenses or distributions to owners (CF E83). In practice, changes in the market value of assets (negative) or liabilities (positive) are recognized as losses while, for example, interest or charitable contributions are recognized as other expenses.
  8. Income is the term generally used when referring to revenue and gains together. A separate term for the aggregation of expenses and losses does not exist.
  9. Contra-accounts are accounts with negative balances that offset other balance sheet accounts. Examples are accumulated depreciation (offset against fixed assets), and the allowance for bad debts (offset against accounts receivable). Deferred interest is also offset against receivables rather than being classified as a liability. Contra accounts are also often referred to as adjustments or adjusting accounts.

Example Chart of Accounts

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Sample Chart of Accounts

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A chart of accounts compatible with IFRS and US GAAP includes balance sheet (assets, liabilities and equity) and the profit and loss (revenue, expenses, gains and losses) classifications. If used by a consolidated or combined entity, it also includes separate classifications for intercompany transactions and balances.

Account Number—Account Title[3]—Balance: Debit (Dr) / Credit (Cr)

1.0.0 Assets (Dr)

  • 1.1.0 Cash And Financial Assets (Dr)
    • 1.1.1 Cash and Cash Equivalents (Dr)
    • 1.1.2 Financial Assets (Investments) (Dr)
    • 1.1.3 Restricted Cash and Financial Assets (Dr)
    • 1.1.4 Additional Financial Assets and Investments (Dr)
  • 1.2.0 Receivables And Contracts (Dr)
    • 1.2.1 Accounts, Notes And Loans Receivable (Dr)
    • 1.2.2 Contracts (Dr)
    • 1.2.3 Nontrade And Other Receivables (Dr)
  • 1.3.0 Inventory (Dr)
    • 1.3.1 Merchandise (Dr)
    • 1.3.2 Raw Material, Parts And Supplies (Dr)
    • 1.3.3 Work In Process (Dr)
    • 1.3.4 Finished Goods (Dr)
    • 1.3.5 Other Inventory (Dr)
  • 1.4.0 Accruals And Additional Assets (Dr)
    • 1.4.1 Prepaid Expense (Dr)
    • 1.4.2 Accrued Income (Dr)
    • 1.4.3 Additional Assets (Dr)
  • 1.5.0 Property, Plant And Equipment (Dr)
    • 1.5.1 Land And Land Improvements (Dr)
    • 1.5.2 Buildings, Structures And Improvements (Dr)
    • 1.5.3 Machinery And Equipment (Dr)
    • 1.5.4 Furniture And Fixtures (Dr)
    • 1.5.5 Right Of Use Assets (Classified As PP&E) (Dr)
    • 1.5.6 Other Property, Plant And Equipment (Dr)
    • 1.5.7 Construction In Progress (Dr)
  • 1.6.0 Property, Plant And Equipment Accumulated Depreciation And Depletion (Cr)
    • 1.6.1 Accumulated Depletion (Cr)
    • 1.6.2 Accumulated Depreciation (Cr)
  • 1.7.0 Intangible Assets (Excluding Goodwill) (Dr)
    • 1.7.1 Intellectual Property (Dr)
    • 1.7.2 Computer Software (Dr)
    • 1.7.3 Trade And Distribution Assets (Dr)
    • 1.7.4 Contracts And Rights (Dr)
    • 1.7.5 Right Of Use Assets (Dr)
    • 1.7.6 Crypto Assets (Dr)
    • 1.7.7 Other Intangible Assets (Dr)
    • 1.7.8 Acquisition In Progress (Dr)
  • 1.8.0 Intangible Assets Accumulated Amortization (Cr)
  • 1.9.0 Goodwill (Dr)

2.0.0 Liabilities (Cr)

  • 2.1.0 Payables (Cr)
    • 2.1.1 Trade Payables (Cr)
    • 2.1.2 Dividends Payable (Cr)
    • 2.1.3 Interest Payable (Cr)
    • 2.1.4 Other Payables (Cr)
  • 2.2.0 Accruals And Other Liabilities (Cr)
    • 2.2.1 Accrued Expenses (Including Payroll) (Cr)
    • 2.2.2 Deferred Income (Unearned Revenue) (Cr)
    • 2.2.3 Accrued Taxes (Other Than Payroll) (Cr)
    • 2.2.4 Other (Non-Financial) Liabilities (Cr)
  • 2.3.0 Financial Liabilities (Cr)
    • 2.3.1 Notes Payable (Cr)
    • 2.3.2 Loans Payable (Cr)
    • 2.3.3 Bonds (Debentures) (Cr)
    • 2.3.4 Other Debts And Borrowings (Cr)
    • 2.3.5 Lease Obligations (Cr)
    • 2.3.6 Derivative Financial Liabilities (Cr)
    • 2.3.7 Other Financial Liabilities (Cr)
  • 2.4.0 Provisions (Contingencies) (Cr)
    • 2.4.1 Customer Related Provisions (Cr)
    • 2.4.2 Ligation And Regulatory Provisions (Cr)
    • 2.4.3 Other Provisions (Cr)

3.0.0 Equity (Cr)

  • 3.1.0 Owners Equity (Attributable To Owners Of Parent) (Cr)
    • 3.1.1 Equity At par (Issued Capital) (Cr)
    • 3.1.2 Additional Paid-in Capital (Cr)
  • 3.2.0 Retained Earnings (Dr / Cr)
    • 3.2.1 Appropriated (Cr)
    • 3.2.2 Unappropriated (Cr)
    • 3.2.3 Deficit (Dr)
    • 3.2.4 In Suspense Zero
  • 3.3.0 Accumulated OCI (Dr / Cr)
    • 3.3.1 Exchange Differences On Translation (Dr / Cr)
    • 3.3.2 Cash Flow Hedges (Dr / Cr)
    • 3.3.3 Gains And Losses On Remeasuring Available-For-Sale Investments (Dr / Cr)
    • 3.3.4 Remeasurements Of Defined Benefit Plans (Dr / Cr)
    • 3.3.5 Revaluation Surplus (IFRS only) (Cr)
  • 3.4.0 Other Equity Items (Dr / Cr)
    • 3.4.1 ESOP Related Items (Dr / Cr)
    • 3.4.2 Subscribed Stock Receivables (Dr)
    • 3.4.3 Treasury Stock (Not Extinguished) (Dr)
    • 3.4.4 Miscellaneous Equity (Cr)
  • 3.5.0 Noncontrolling (Minority) Interest (Cr)

4.0.0 Revenue (Cr)

  • 4.1.0 Recognized Point Of Time (Cr)
    • 4.1.1 Goods (Cr)
    • 4.1.2 Services (Cr)
  • 4.2.0 Recognized Over Time (Cr)
    • 4.2.1 Products (Cr)
    • 4.2.2 Services (Cr)
  • 4.3.0 Adjustments (Dr)
    • 4.3.1 Variable Consideration (Dr)
    • 4.3.2 Consideration Paid (Payable) To Customers (Dr)
    • 4.3.3 Other Adjustments (Dr)

5.0.0 Expenses (Dr)

  • 5.1.0 Expenses Classified By Nature (Dr)
    • 5.1.1 Merchandise, Material, Parts And Supplies (Dr)
    • 5.1.2 Employee Benefits (Dr)
    • 5.1.3 Services (Dr)
    • 5.1.4 Rent, Depreciation, Amortization And Depletion (Dr)
    • 5.1.5 Increase (Decrease) In Inventories Of Finished Goods And Work In Progress (Dr / Cr)
    • 5.1.6 Other Work Performed By Entity And Capitalized (Cr)
  • 5.2.0 Expenses Classified By Function (Dr)
    • 5.2.1 Cost Of Sales (Dr)
    • 5.2.2 Selling, General And Administrative (Dr)
    • 5.2.3 Credit Loss (Reversal) On Receivables (Dr / Cr)

6.0.0 Other (Non-Operating) Income And Expenses (Dr / Cr)

  • 6.1.0 Other Revenue And Expenses (Dr / Cr)
    • 6.1.1 Other Revenue (Cr)
    • 6.1.2 Other Expenses (Dr)
  • 6.2.0 Gains And Losses (Dr / Cr)
    • 6.2.1 Foreign Currency Transaction Gain (Loss) (Dr / Cr)
    • 6.2.2 Gain (Loss) On Investments (Dr / Cr)
    • 6.2.3 Gain (Loss) On Derivatives (Dr / Cr)
    • 6.2.4 Crypto Asset Gain (Loss) (Dr / Cr)
    • 6.2.5 Gain (Loss) On Disposal Of Assets (Dr / Cr)
    • 6.2.6 Debt Related Gain (Loss) (Dr / Cr)
    • 6.2.7 Impairment Loss (Dr)
    • 6.2.8 Other Gains And Losses (Dr / Cr)
  • 6.3.0 Taxes (Other Than Income And Payroll) And Fees (Dr)
    • 6.3.1 Real Estate Taxes And Insurance (Dr)
    • 6.3.2 Highway (Road) Taxes And Tolls (Dr)
    • 6.3.3 Direct Tax And License Fees (Dr)
    • 6.3.4 Excise And Sales Taxes (Dr)
    • 6.3.5 Customs Fees And Duties (Not Classified As Sales Or Excise) (Dr)
    • 6.3.6 Non-Deductible VAT (GST) (Dr)
    • 6.3.7 General Insurance Expense (Dr)
    • 6.3.8 Administrative Fees (Revenue Stamps) (Dr)
    • 6.3.9 Fines And Penalties (Dr)
    • 6.3.10 Miscellaneous Taxes (Dr)
    • 6.3.11 Other Taxes And Fees (Dr)
  • 6.4.0 Income Tax Expense (Benefit) (Dr / Cr)

7.0.0 Intercompany And Related Party Accounts (Dr / Cr)

  • 7.1.0 Intercompany And Related Party Assets (Dr)
    • 7.1.1 Intercompany Balances (Eliminated In Consolidation) (Dr)
    • 7.1.2 Related Party Balances (Reported Or Disclosed) (Dr)
    • 7.1.3 Intercompany Investments (Dr)
  • 7.2.0 Intercompany And Related Party Liabilities (Cr)
    • 7.2.1 Intercompany Balances (Eliminated In Consolidation) (Cr)
    • 7.2.2 Related Party Balances (Reported Or Disclosed) (Cr)
  • 7.3.0 Intercompany And Related Party Income And Expense (Dr / Cr)
    • 7.3.1 Intercompany And Related Party Income (Cr)
    • 7.3.2 Intercompany And Related Party Expenses (Dr)
    • 7.3.3 Income (Loss) From Equity Method Investments (Dr)

French GAAP Chart of Accounts Layout

[edit]

The French generally accepted accounting principles chart of accounts layout is used in France, Belgium, Spain and many francophone countries. The use of the French GAAP chart of accounts layout (but not the detailed accounts) is stated in French law.

In France, liabilities and equity are seen as negative assets and not account types in themselves, just balance accounts.

Profit and Loss Accounts

[edit]
  • Class 6 Costs Accounts
  • Class 7 Revenues Accounts

Special Accounts

[edit]
  • Class 8 Special Accounts

Spanish GAAP Chart of Accounts Layout

[edit]

The Spanish generally accepted accounting principles chart of accounts layout is used in Spain. It is very similar to the French layout.

  • Class 3 Stocks Accounts
  • Class 4 Third-Party Accounts
  • Class 5 Bank & Cash

Profit and Loss Accounts

[edit]
  • Class 6 Costs Accounts
  • Class 7 Revenues Accounts

Special Accounts

[edit]
  • Class 8 Expenses Recognised In Equity
  • Class 9 Income Recognised In Equity

Swedish BAS chart of accounts layout

[edit]

The complete Swedish BAS standard chart of about 1250 accounts is also available in English and German texts in a printed publication from the non-profit branch BAS organisation. BAS is a private organisation originally created by the Swedish industry and today owned by a set general interest groups like, several industry organisations, several government authorities (incl GAAP and the revenue service), the Church of Sweden, the audits and accountants organisation and SIE (file format) organisation, as close as consensus possibly (a Swedish way of working without legal demands).

The BAS chart use is not legally required in Sweden. However, it is politically anchored and so well developed that it is commonly used.

The BAS chart is not an SIS national standard because SIS is organised on pay documentation and nobody in the computer world are paying for standard documents[citation needed]. BAS were SIS standard but left. SIS Swedish Standards Institute is the Swedish domestic member of ISO. This is not a government procurement problem due to the fact all significant governmental authorities are significant members/part owners of BAS.

An almost identical chart of accounts is used in Norway.

Balance Sheet Accounts

[edit]
Asset accounts
[edit]
  • 1150 Buildings and land assets
  • 1200 Inventories, Machines
  • 1210 Alterna
  • 1220 IngDirect Savings
  • 1230 Tangerine chequing
  • 1240 Account Receivable
Liability accounts
[edit]
  • 2300 Loans
  • 2400 Short debts (payables 2440)
  • 2500 Income Tax Payable
  • 2600 VAT Payable
  • 2700 Wages Payable
  • 2800-2999 other liabilities

Profit & Loss accounts

[edit]
Revenue accounts
[edit]
  • 3000 Revenue Accounts
Expense accounts
[edit]
  • 4000 Costs directly related to revenues
  • 5000-7999 General expense Accounts
  • 8000 Financial Accounts
  • 9000 Contra-accounts

See also

[edit]
  • General ledger
  • Financial statement
  • BAS Swedish standard chart of accounts, Version in English
  • French generally accepted accounting principles
  • Metadata, or "data about data." The Chart of accounts is in itself Metadata. It's a classification scheme that enables (intelligent) aggregation of individual financial transactions into coherent, and hopefully informative, financial statements.
  • XBRL eXtensible Business Reporting Language, and the related, required encoding (or "tagging") of public company financial statement data in the U.S. by the Securities and Exchange Commission. In those instances The Chart of accounts must support the required encodings.
  • Regulation S-X, Regulation S-K and Proxy statement In the U.S. the Securities and Exchange Commission prescribes and requires numerous quarterly and annual financial statement disclosures. A large portion of the required disclosures are numeric and must be supported by the Chart of accounts.

References

[edit]
  1. ^ "Understanding Asset, Liability, Equity, Income and Expenses | Part-3 Accounting Series". YouTube. 15 April 2022.
  2. ^ "Statement of Financial Accounting Concepts No. 8, Chapter 4".
  3. ^ "Chart of Accounts | IFRS and US GAAP".

 

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work.[1] Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, and disability insurance. Employment is typically governed by employment laws, organization or legal contracts.

Employees and employers

[edit]

An employee contributes labour and expertise to an endeavor of an employer or of a person conducting a business or undertaking (PCB)[2] and is usually hired to perform specific duties which are packaged into a job. In a corporate context, an employee is a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business.[3]

Independent contractor

[edit]

An issue that arises in most companies, especially the ones that are in the gig economy, is the classification of workers. A lot of workers that fulfill gigs are often hired as independent contractors.

To categorize a worker as an independent contractor rather than an employee, an independent contractor must agree with the client on what the finished work product will be and then the contractor controls the means and manner of achieving the desired outcome. Secondly, an independent contractor offers services to the public at large, not just to one business, and is responsible for disbursing payments from the client, paying unreimbursed expenses, and providing his or her own tools to complete the job. Third, the relationship of the parties is often evidenced by a written agreement that specifies that the worker is an independent contractor and is not entitled to employee benefits; the services provided by the worker are not key to the business; and the relationship is not permanent.[4]

As a general principle of employment law, in the United States, there is a difference between an agent and an independent contractor. The default status of a worker is an employee unless specific guidelines are met, which can be determined by the ABC test.[5][6] Thus, clarifying whether someone who performs work is an independent contractor or an employee from the beginning, and treating them accordingly, can save a company from trouble later on.

Provided key circumstances, including ones such as that the worker is paid regularly, follows set hours of work, is supplied with tools from the employer, is closely monitored by the employer, acting on behalf of the employer, only works for one employer at a time, they are considered an employee,[7] and the employer will generally be liable for their actions and be obliged to give them benefits.[8] Similarly, the employer is the owner of any invention created by an employee "hired to invent", even in the absence of an assignment of inventions. In contrast, a company commissioning a work by an independent contractor will not own the copyright unless the company secures either a written contract stating that it is a "work made for hire" or a written assignment of the copyright. In order to stay protected and avoid lawsuits, an employer has to be aware of that distinction.[4]

Employer–worker relationship

[edit]

Employer and managerial control within an organization rests at many levels and has important implications for staff and productivity alike, with control forming the fundamental link between desired outcomes and actual processes. Employers must balance interests such as decreasing wage constraints with a maximization of labor productivity in order to achieve a profitable and productive employment relationship.

Labor acquisition / hiring

[edit]

The main ways for employers to find workers and for people to find employers are via jobs listings in newspapers (via classified advertising) and online, also called job boards. Employers and job seekers also often find each other via professional recruitment consultants which receive a commission from the employer to find, screen and select suitable candidates. However, a study has shown that such consultants may not be reliable when they fail to use established principles in selecting employees.[1] A more traditional approach is with a "Help Wanted" sign in the establishment (usually hung on a window or door[9] or placed on a store counter).[3] Evaluating different employees can be quite laborious but setting up different techniques to analyze their skills to measure their talents within the field can be best through assessments. Employer and potential employee commonly take the additional step of getting to know each other through the process of a job interview.

Training and development

[edit]
Wiki-training with employees of Regional Institute of Culture in Katowice 02

Training and development refers to the employer's effort to equip a newly hired employee with the necessary skills to perform at the job, and to help the employee grow within the organization. An appropriate level of training and development helps to improve employee's job satisfaction.[10]

Remuneration

[edit]

There are many ways that employees are paid, including by hourly wages, by piecework, by yearly salary, or by gratuities (with the latter often being combined with another form of payment). In sales jobs and real estate positions, the employee may be paid a commission, a percentage of the value of the goods or services that they have sold. In some fields and professions (e.g., executive jobs), employees may be eligible for a bonus if they meet certain targets. Some executives and employees may be paid in shares or stock options, a compensation approach that has the added benefit, from the company's point of view, of helping to align the interests of the compensated individual with the performance of the company.

Under the faithless servant doctrine, a doctrine under the laws of a number of states in the United States, and most notably New York State law, an employee who acts unfaithfully towards his employer must forfeit all of the compensation he received during the period of his disloyalty.[11][12][13][14][15]

Employee benefits

[edit]

Employee benefits are various non-wage compensation provided to employees in addition to their wages or salaries. The benefits can include: housing (employer-provided or employer-paid), group insurance (health, dental, life etc.), disability income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits. In some cases, such as with workers employed in remote or isolated regions, the benefits may include meals. Employee benefits can improve the relationship between employee and employer and lowers staff turnover.[16]

Organizational justice

[edit]

Organizational justice is an employee's perception and judgement of employer's treatment in the context of fairness or justice. The resulting actions to influence the employee-employer relationship is also a part of organizational justice.[16]

Workforce organizing

[edit]

Employees can organize into trade or labor unions, which represent the workforce to collectively bargain with the management of organizations about working, and contractual conditions and services.[17]

Ending employment

[edit]

Usually, either an employee or employer may end the relationship at any time, often subject to a certain notice period. This is referred to as at-will employment. The contract between the two parties specifies the responsibilities of each when ending the relationship and may include requirements such as notice periods, severance pay, and security measures.[17] A contract forbidding an employee from leaving their employment, under penalty of a surety bond, is referred to as an employment bond. In some professions, notably teaching, civil servants, university professors, and some orchestra jobs, some employees may have tenure, which means that they cannot be dismissed at will. Another type of termination is a layoff.

Wage labor

[edit]
Worker assembling rebar for a water treatment plant in Mazatlan, Sinaloa, Mexico

Wage labor is the socioeconomic relationship between a worker and an employer, where the worker sells their labor under a formal or informal employment contract. These transactions usually occur in a labor market where wages are market-determined.[10][16] In exchange for the wages paid, the work product generally becomes the undifferentiated property of the employer, except for special cases such as the vesting of intellectual property patents in the United States where patent rights are usually vested in the original personal inventor. A wage laborer is a person whose primary means of income is from the selling of his or her labor in this way.[17]

In modern mixed economies such as that of the OECD countries, it is currently the dominant form of work arrangement. Although most work occurs following this structure, the wage work arrangements of CEOs, professional employees, and professional contract workers are sometimes conflated with class assignments, so that "wage labor" is considered to apply only to unskilled, semi-skilled or manual labor.[18]

Wage slavery

[edit]

Wage labor, as institutionalized under today's market economic systems, has been criticized,[17] especially by socialists,[18][19][20][21] using the pejorative term wage slavery.[22][23] Socialists draw parallels between the trade of labor as a commodity and slavery. Cicero is also known to have suggested such parallels.[24]

The American philosopher John Dewey posited that until "industrial feudalism" is replaced by "industrial democracy", politics will be "the shadow cast on society by big business".[25] Thomas Ferguson has postulated in his investment theory of party competition that the undemocratic nature of economic institutions under capitalism causes elections to become occasions when blocs of investors coalesce and compete to control the state plus cities.[26]

American business theorist Jeffrey Pfeffer posits that contemporary employment practices and employer commonalities in the United States, including toxic working environments, job insecurity, long hours and increased performance pressure from management, are responsible for 120,000 excess deaths annually, making the workplace the fifth leading cause of death in the United States.[27][28]

Employment contract

[edit]

Australia

[edit]

Australian employment has been governed by the Fair Work Act since 2009.[29]

Bangladesh

[edit]

Bangladesh Association of International Recruiting Agencies (BAIRA) is an association of national level with its international reputation of co-operation and welfare of the migrant workforce as well as its approximately 1200 members agencies in collaboration with and support from the Government of Bangladesh.[18]

Canada

[edit]

In the Canadian province of Ontario, formal complaints can be brought to the Ministry of Labour. In the province of Quebec, grievances can be filed with the Commission des normes du travail.[21]

Germany

[edit]

Two of the prominent examples of work and employment contracts in Germany are the Werksvertrag[30][31] or the Arbeitsvertrag,[32][33][34][35] which is a form of Dienstleistungsvertrag (service-oriented contract). An Arbeitsvertrag can also be temporary,[36] whereas a temporary worker is working under Zeitarbeit[37] or Leiharbeit.[38] Another employment setting is Arbeitnehmerüberlassung (ANÜ).[39][40][41]

India

[edit]

India has options for a fixed term contract or a permanent contract. Both contracts are entitled to minimum wages, fixed working hours and social security contributions.[21]

Pakistan

[edit]

Pakistan has no contract Labor, Minimum Wage and Provident Funds Acts. Contract labor in Pakistan must be paid minimum wage and certain facilities are to be provided to labor. However, the Acts are not yet fully implemented.[18]

Philippines

[edit]

In the Philippines, employment is regulated by the Department of Labor and Employment.[42]

Sweden

[edit]

According to Swedish law,[43] there are three types of employment.

  • Test employment (Swedish: Provanställning), where the employer hires a person for a test period of 6 months maximum. The employment can be ended at any time without giving any reason. This type of employment can be offered only once per employer and in employee combination. Usually, a time limited or normal employment is offered after a test employment.[44]
  • Time limited employment (Swedish: Tidsbegränsad anställning). The employer hires a person for a specified time. Usually, they are extended for a new period. Total maximum two years per employer and employee combination, then it automatically counts as a normal employment.
  • Normal employment (Swedish: Tillsvidareanställning / Fast anställning), which has no time limit (except for retirement etc.). It can still be ended for two reasons: personal reason, immediate end of employment only for strong reasons such as crime, or lack of work tasks (Swedish: Arbetsbrist), cancellation of employment, usually because of bad income for the company. There is a cancellation period of 1–6 months, and rules for how to select employees, basically those with shortest employment time shall be cancelled first.[44]

There are no laws about minimum salary in Sweden. Instead, there are agreements between employer organizations and trade unions about minimum salaries, and other employment conditions.

There is a type of employment contract which is common but not regulated in law, and that is Hour employment (Swedish: Timanställning), which can be Normal employment (unlimited), but the work time is unregulated and decided per immediate need basis. The employee is expected to be answering the phone and come to work when needed, e.g. when someone is ill and absent from work. They will receive salary only for actual work time and can in reality be fired for no reason by not being called anymore. This type of contract is common in the public sector.[44]

United Kingdom

[edit]
A call centre worker confined to a small workstation/booth

In the United Kingdom, employment contracts are categorized by the government into the following types:[45]

  • Fixed-term contract: last for a certain length of time, are set in advance, end when a specific task is completed, ends when a specific event takes place.
  • Full-time or part-time contract: has no defined length of time, can be terminated by either party, is to accomplish a specific task, specified number of hours.[42]
  • Agency staff
  • Freelancers, Consultants and Contractors
  • Zero-hour contracts

United States

[edit]
All employees, private industries, by branches

For purposes of U.S. federal income tax withholding, 26 U.S.C. § 3401(c) provides a definition for the term "employee" specific to chapter 24 of the Internal Revenue Code:

Government employment as % of total employment in EU

"For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation."[46] This definition does not exclude all those who are commonly known as 'employees'. "Similarly, Latham's instruction which indicated that under 26 U.S.C. § 3401(c) the category of 'employee' does not include privately employed wage earners is a preposterous reading of the statute. It is obvious that within the context of both statutes the word 'includes' is a term of enlargement not of limitation, and the reference to certain entities or categories is not intended to exclude all others."[47]

Employees are often contrasted with independent contractors, especially when there is dispute as to the worker's entitlement to have matching taxes paid, workers compensation, and unemployment insurance benefits. However, in September 2009, the court case of Brown v. J. Kaz, Inc. ruled that independent contractors are regarded as employees for the purpose of discrimination laws if they work for the employer on a regular basis, and said employer directs the time, place, and manner of employment.[42]

In non-union work environments, in the United States, unjust termination complaints can be brought to the United States Department of Labor.[48]

Labor unions are legally recognized as representatives of workers in many industries in the United States. Their activity today centers on collective bargaining over wages, benefits, and working conditions for their membership, and on representing their members in disputes with management over violations of contract provisions. Larger unions also typically engage in lobbying activities and electioneering at the state and federal level.[42]

Most unions in America are aligned with one of two larger umbrella organizations: the AFL–CIO created in 1955, and the Change to Win Federation which split from the AFL–CIO in 2005. Both advocate policies and legislation on behalf of workers in the United States and Canada, and take an active role in politics. The AFL–CIO is especially concerned with global trade issues.[26]

[edit]

Younger age workers

[edit]
Youth employment rate in the US, i.e. the ratio of employed persons (15–24Y) in an economy to total labor force (15–24Y)[49]

Young workers are at higher risk for occupational injury and face certain occupational hazards at a higher rate; this is generally due to their employment in high-risk industries. For example, in the United States, young people are injured at work at twice the rate of their older counterparts.[50] These workers are also at higher risk for motor vehicle accidents at work, due to less work experience, a lower use of seat belts, and higher rates of distracted driving.[51][52] To mitigate this risk, those under the age of 17 are restricted from certain types of driving, including transporting people and goods under certain circumstances.[51]

High-risk industries for young workers include agriculture, restaurants, waste management, and mining.[50][51] In the United States, those under the age of 18 are restricted from certain jobs that are deemed dangerous under the Fair Labor Standards Act.[51]

Youth employment programs are most effective when they include both theoretical classroom training and hands-on training with work placements.[53]

In the conversation of employment among younger aged workers, youth unemployment has also been monitored. Youth unemployment rates tend to be higher than the adult rates in every country in the world.[54]

Older age workers

[edit]

Those older than the statutory defined retirement age may continue to work, either out of enjoyment or necessity. However, depending on the nature of the job, older workers may need to transition into less-physical forms of work to avoid injury. Working past retirement age also has positive effects, because it gives a sense of purpose and allows people to maintain social networks and activity levels.[55] Older workers are often found to be discriminated against by employers.[56]

Working poor

[edit]
A worker in Dhaka, Bangladesh

Employment is no guarantee of escaping poverty, the International Labour Organization (ILO) estimates that as many as 40% of workers are poor, not earning enough to keep their families above the $2 a day poverty line.[44] For instance, in India most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks.[44] According to the UNRISD, increasing labor productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%.[44] Both increased employment opportunities and increased labor productivity (as long as it also translates into higher wages) are needed to tackle poverty. Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labor market policies.[44] This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show.[44] In Vietnam, for example, employment growth has slowed while productivity growth has continued.[44] Furthermore, productivity increases do not always lead to increased wages, as can be seen in the United States, where the gap between productivity and wages has been rising since the 1980s.[44] Oxfam and social scientist Mark Robert Rank have argued that the economy of the United States is failing to provide jobs that can adequately support families.[57][58] According to sociologist Matthew Desmond, the US "offers some of the lowest wages in the industrialized world," which has "swelled the ranks of the working poor, most of whom are thirty-five or older."[59]

Researchers at the Overseas Development Institute argue that there are differences across economic sectors in creating employment that reduces poverty.[44] 24 instances of growth were examined, in which 18 reduced poverty. This study showed that other sectors were just as important in reducing unemployment, such as manufacturing.[44] The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling.[44]

Growth, employment and poverty[44]
  Number of
episodes
Rising
agricultural
employment
Rising
industrial
employment
Rising
services
employment
Growth episodes associated with falling poverty rates
18
6
10
15
Growth episodes associated with no fall in poverty rates
6
2
3
1

Models of the employment relationship

[edit]

Scholars conceptualize the employment relationship in various ways.[60] A key assumption is the extent to which the employment relationship necessarily includes conflicts of interests between employers and employees, and the form of such conflicts.[61] In economic theorizing, the labor market mediates all such conflicts such that employers and employees who enter into an employment relationship are assumed to find this arrangement in their own self-interest. In human resource management theorizing, employers and employees are assumed to have shared interests (or a unity of interests, hence the label “unitarism”). Any conflicts that exist are seen as a manifestation of poor human resource management policies or interpersonal clashes such as personality conflicts, both of which can and should be managed away. From the perspective of pluralist industrial relations, the employment relationship is characterized by a plurality of stakeholders with legitimate interests (hence the label “pluralism), and some conflicts of interests are seen as inherent in the employment relationship (e.g., wages v. profits). Lastly, the critical paradigm emphasizes antagonistic conflicts of interests between various groups (e.g., the competing capitalist and working classes in a Marxist framework) that are part of a deeper social conflict of unequal power relations. As a result, there are four common models of employment:[62]

  1. Mainstream economics: employment is seen as a mutually advantageous transaction in a free market between self-interested legal and economic equals
  2. Human resource management (unitarism): employment is a long-term partnership of employees and employers with common interests
  3. Pluralist industrial relations: employment is a bargained exchange between stakeholders with some common and some competing economic interests and unequal bargaining power due to imperfect labor markets[44]
  4. Critical industrial relations: employment is an unequal power relation between competing groups that is embedded in and inseparable from systemic inequalities throughout the socio-politico-economic system.

These models are important because they help reveal why individuals hold differing perspectives on human resource management policies, labor unions, and employment regulation.[63] For example, human resource management policies are seen as dictated by the market in the first view, as essential mechanisms for aligning the interests of employees and employers and thereby creating profitable companies in the second view, as insufficient for looking out for workers’ interests in the third view, and as manipulative managerial tools for shaping the ideology and structure of the workplace in the fourth view.[64]

Academic literature

[edit]

Literature on the employment impact of economic growth and on how growth is associated with employment at a macro, sector and industry level was aggregated in 2013.[65]

Researchers found evidence to suggest growth in manufacturing and services have good impact on employment. They found GDP growth on employment in agriculture to be limited, but that value-added growth had a relatively larger impact.[44] The impact on job creation by industries/economic activities as well as the extent of the body of evidence and the key studies. For extractives, they again found extensive evidence suggesting growth in the sector has limited impact on employment. In textiles, however, although evidence was low, studies suggest growth there positively contributed to job creation. In agri-business and food processing, they found impact growth to be positive.[65]

They found that most available literature focuses on OECD and middle-income countries somewhat, where economic growth impact has been shown to be positive on employment. The researchers didn't find sufficient evidence to conclude any impact of growth on employment in LDCs despite some pointing to the positive impact, others point to limitations. They recommended that complementary policies are necessary to ensure economic growth's positive impact on LDC employment. With trade, industry and investment, they only found limited evidence of positive impact on employment from industrial and investment policies and for others, while large bodies of evidence does exist, the exact impact remains contested.[65]

Researchers have also explored the relationship between employment and illicit activities. Using evidence from Africa, a research team found that a program for Liberian ex-fighters reduced work hours on illicit activities. The employment program also reduced interest in mercenary work in nearby wars. The study concludes that while the use of capital inputs or cash payments for peaceful work created a reduction in illicit activities, the impact of training alone is rather low.[66]

Globalization and employment relations

[edit]

The balance of economic efficiency and social equity is the ultimate debate in the field of employment relations.[67] By meeting the needs of the employer; generating profits to establish and maintain economic efficiency; whilst maintaining a balance with the employee and creating social equity that benefits the worker so that he/she can fund and enjoy healthy living; proves to be a continuous revolving issue in westernized societies.[67]

Globalization has affected these issues by creating certain economic factors that disallow or allow various employment issues. Economist Edward Lee (1996) studies the effects of globalization and summarizes the four major points of concern that affect employment relations:

  1. International competition, from the newly industrialized countries, will cause unemployment growth and increased wage disparity for unskilled workers in industrialized countries. Imports from low-wage countries exert pressure on the manufacturing sector in industrialized countries and foreign direct investment (FDI) is attracted away from the industrialized nations, towards low-waged countries.[67]
  2. Economic liberalization will result in unemployment and wage inequality in developing countries. This happens as job losses in uncompetitive industries outstrip job opportunities in new industries.
  3. Workers will be forced to accept worsening wages and conditions, as a global labor market results in a “race to the bottom”. Increased international competition creates a pressure to reduce the wages and conditions of workers.[67]
  4. Globalization reduces the autonomy of the nation state. Capital is increasingly mobile and the ability of the state to regulate economic activity is reduced.

What also results from Lee's (1996) findings is that in industrialized countries an average of almost 70 per cent of workers are employed in the service sector, most of which consists of non-tradable activities. As a result, workers are forced to become more skilled and develop sought after trades, or find other means of survival. Ultimately this is a result of changes and trends of employment, an evolving workforce, and globalization that is represented by a more skilled and increasing highly diverse labor force, that are growing in non standard forms of employment (Markey, R. et al. 2006).[67]

Alternatives

[edit]

Subcultures

[edit]

Various youth subcultures have been associated with not working, such as the hippie subculture in the 1960s and 1970s (which endorsed the idea of "dropping out" of society) and the punk subculture.

Post-secondary education

[edit]

One of the alternatives to work is engaging in post-secondary education at a college, university or professional school. One of the major costs of obtaining a post-secondary education is the opportunity cost of forgone wages due to not working. At times when jobs are hard to find, such as during recessions, unemployed individuals may decide to get post-secondary education, because there is less of an opportunity cost.

Social assistance

[edit]

In some countries, individuals who are not working can receive social assistance support (e.g., welfare or food stamps) to enable them to rent housing, buy food, repair or replace household goods, maintenance of children and observe social customs that require financial expenditure.

Volunteerism

[edit]

Workers who are not paid wages, such as volunteers who perform tasks for charities, hospitals or not-for-profit organizations, are generally not considered employed. One exception to this is an internship, an employment situation in which the worker receives training or experience (and possibly college credit) as the chief form of compensation.[68]

Indentured servitude and slavery

[edit]

Those who work under obligation for the purpose of fulfilling a debt, such as indentured servants, or as property of the person or entity they work for, such as slaves, do not receive pay for their services and are not considered employed. Some historians[which?] suggest that slavery is older than employment, but both arrangements have existed for all recorded history.[citation needed] Indentured servitude and slavery are not considered compatible with human rights or with democracy.[68]

Self-employment

[edit]

Self-employment is the state of working for oneself rather than an employer. Tax authorities will generally view a person as self-employed if the person chooses to be recognised as such or if the person is generating income for which a tax return needs to be filed. In the real world, the critical issue for tax authorities is not whether a person is engaged in business activity (called trading even when referring to the provision of a service) but whether the activity is profitable and therefore potentially taxable. In other words, the trading is likely to be ignored if there is no profit, so occasional and hobby- or enthusiast-based economic activity is generally ignored by tax authorities. Self-employed people are usually classified as a sole proprietor (or sole trader), independent contractor, or as a member of a partnership.

Self-employed people generally find their own work rather than being provided with work by an employer and instead earn income from a profession, a trade, or a business that they operate. In some countries, such as the United States and the United Kingdom, the authorities are placing more emphasis on clarifying whether an individual is self-employed or engaged in disguised employment, in other words pretending to be in a contractual intra-business relationship to hide what is in fact an employer-employee relationship.

Local employment

[edit]

Local employment initiatives aim to ensure that residents of the area adjacent to an employers' premises are offered employment there. Local jobs initiatives are common in a construction context.[69] In retail, the Westfield Centre in west London, which opened in 2008, has been noted as an example offering employment to local residents: during the period when the centre was under construction, up to 3000 local people received pre-employment training through a partnership scheme aiming to ensure that a significant proportion of the centre's jobs were taken up by local people. 40% of the centre's management staff had been locally recruited at the time when the centre opened.[70]

Statistics

[edit]

See also

[edit]
  • Alternative employment arrangements
  • Automation
  • Bullshit job
  • Career-oriented social networking market
  • Critique of work
  • Domestic inquiry
  • Employer branding
  • Employer registration
  • Employment gap
  • Employment of autistic people
  • Employment rate
  • Employment website
  • The End of Work
  • Equal opportunity employment
  • Equal pay for equal work
  • Ethnic Penalty
  • Faithless servant
  • Green growth
  • Job analysis
  • Job description
  • Job guarantee
  • Jobless recovery
  • Labor economics
  • Labor power
  • Labor rights
  • List of largest employers
  • Lump of labor fallacy
  • Onboarding
  • Payroll
  • Personnel selection
  • Post-work society
  • Protestant work ethic
  • Refusal of work
  • Reserve army of labor (Marxism)
  • Salary inversion
  • Staffing models
  • Universal basic income
  • Work ethic
  • Work (human activity)

Notes and references

[edit]
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  2. ^ Archer, Richard; Borthwick, Kerry; Travers, Michelle; Ruschena, Leo (2017). WHS: A Management Guide (4th ed.). Cengage Learning Australia. pp. 30–31. ISBN 978-0-17-027079-3. Retrieved 2016-03-30. The most significant definitions are 'person conducting a business or undertaking' (PCBU). 'worker' and 'workplace'. [...] 'PCBU' is a wider ranging term than 'employer', though this will be what most people understand by it.
  3. ^ a b Robert A. Ristau (2010). Intro to Business. Cengage Learning. p. 74. ISBN 978-0-538-74066-1.
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  43. ^ Lag om anställningsskydd (1982:80)
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  46. ^ 26 U.S.C. § 3401(c)
  47. ^ United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985).
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  54. ^ Pastore, Francesco (2018-01-23). "Why is youth unemployment so high and different across countries?". IZA World of Labor. doi:10.15185/izawol.420.
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  56. ^ Baert, Stijn (February 20, 2016). "Getting Grey Hairs in the Labour Market: An Alternative Experiment on Age Discrimination". Journal of Economic Psychology. 57: 86–101. doi:10.1016/j.joep.2016.10.002. hdl:10419/114164. S2CID 38265879.
  57. ^ Henderson, Kaitlyn (May 3, 2023). "Where hard work doesn't pay off: An index of US labor policies compared to peer nations". Oxfam. Retrieved February 18, 2024. The US is falling drastically behind similar countries in mandating adequate wages, protections, and rights for millions of workers and their families. The wealthiest country in the world is near the bottom of every dimension of this index.
  58. ^ Rank, Mark Robert (2023). The Poverty Paradox: Understanding Economic Hardship Amid American Prosperity. Oxford University Press. pp. 4, 121. ISBN 978-0190212636. The tendency of our free market economy has been to produce a growing number of jobs that will no longer support a family. In addition, the basic nature of capitalism ensures that unemployment exists at modest levels. Both of these directly result in a shortage of economic opportunities in American society. In addition, the absence of social supports stems from failings at the political and policy levels. The United States has traditionally lacked the political desire to put in place effective policies and programs that would support the economically vulnerable. Structural failing at the economic and political levels have therefore produced a lack of opportunities and supports, resulting in high rates of American poverty.
  59. ^ Desmond, Matthew (2023). Poverty, by America. Crown Publishing Group. p. 62. ISBN 9780593239919.
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General bibliography

[edit]
  • Acocella, Nicola (2007). Social pacts, employment and growth: a reappraisal of Ezio Tarantelli's thought. Heidelberg: Springer Verlag. ISBN 978-3-7908-1915-1.
  • Anderson, Elizabeth (2017). Private Government: How Employers Rule Our Lives (and Why We Don't Talk about It). Princeton, NJ: Princeton University Press. ISBN 978-0-691-17651-2.
  • Dubin, Robert (1958). The World of Work: Industrial Society and Human Relations. Englewood Cliffs, N.J: Prentice-Hall. p. 213. OCLC 964691.
  • Ellerman, David P. (1992). Property and Contract in Economics: The Case for Economic Democracy. Blackwell. ISBN 1-55786-309-1.
  • Freeman, Richard B.; Goroff, Daniel L. (2009). Science and Engineering Careers in the United States: An Analysis of Markets and Employment. Chicago: University of Chicago Press. ISBN 978-0-226-26189-8.
  • Ferguson, Thomas (1995). Golden Rule : The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems. Chicago: University of Chicago Press. ISBN 0-226-24317-6. Retrieved January 26, 2023.
  • Lee, Eddy (January 1996). "Globalization and Employment: Is Anxiety Justified?". International Labour Review. 135 (5): 485–98. Archived from the original on 2013-05-16. Retrieved 2017-08-27.
  • Markey, Raymond; Hodgkinson, Ann; Kowalczyk, Jo (2002). "Gender, part-time employment and employee participation in Australian workplaces". Employee Relations. 24 (2): 129–50. doi:10.1108/01425450210420884.
  • Ostergaard, Geoffrey (1997). The Tradition of Workers' Control. London: Freedom Press. ISBN 978-0-900384-91-2.
  • Stone, Raymond J. (2005). Human Resource Management (5th ed.). Milton, Qld: John Wiley. pp. 412–14. ISBN 978-0-470-80403-2.
  • Thompson, E. P. (1966) [1963]. The Making of the English Working Class. New York: Vintage. ISBN 978-0-394-70322-0.
  • Wood, Jack M. (2004). Organisational Behaviour: A Global Perspective (3rd ed.). Milton, Qld: Wiley. pp. 355–57. ISBN 978-0-470-80262-5.
[edit]
  • Business Link (archived from the original on 29 September 2012)
  • "Labor and Employment". Government Information Library. University of Colorado at Boulder. Archived from the original on 2009-06-12. Retrieved 2009-08-05.
  • "Overview and topics of labour statistics". Statistics and databases. International Labour Organization.

 

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