It was 32 degrees in Austin, Texas as SXSW (South by SouthWest) came to an end yesterday. But the human hotspots at SXSW making the news aren’t the sweaty festival goers wandering from interactive events, to music concerts or film screenings – all a part of the ten day festival. The Human Hotspots making the news are referred to as Homeless Hotspots. Marketing firm BBH has created a wireless service for SXSW operated by homeless people. The company has taken 14 volunteers from a homeless shelter in Austin, provided them with wireless devices, and t-shirts that read:
I’M [FIRST NAME],
A 4G HOTSPOT
SMS HH [FIRST NAME]
TO 25827 FOR ACCESS
A 4G HOTSPOT
SMS HH [FIRST NAME]
TO 25827 FOR ACCESS
The volunteers (13 men and one woman) are standing or walking around at locations near the Austin Convention Centre. SXSW attendees presumably will see the people and decide to use the service. The charge for the service was a suggested donation of $2.00 for 15 minutes. The money would go directly to the homeless person. There is no information out yet as to how much usage there was, nor how much each homeless person took in.
Here’s how the project is described on the homelesshotspots website:
Homeless Hotspots is a charitable innovation initiative by BBH New York. It attempts to modernize the Street Newspaper model employed to support homeless populations.
As digital media proliferates, these newspapers face increased pressure. Our hope is to create a modern version of this successful model, offering homeless individuals an opportunity to sell a digital service instead of a material commodity. SxSW Interactive attendees can pay what they like to access 4G networks carried by our homeless collaborators. This service is intended to deliver on the demand for better transit connectivity during the conference.
If you'd like to support Homeless Hotspots from afar, click the button below to donate. All proceeds go directly to Front Steps Homeless shelter.
All proceeds paid for access go directly to the person selling you access. This is a form of income for them.
Stories about this being exploitation of the homeless abound in the media. Most of what I have read deals with dehumanizing aspect of turning people into hardware. BBH Labs launched a similar and remarkably successful project in New York called Underheard in New York in which 4 homeless men were given mobile devices and then regularly tweeted about their experience. As a result of that project, one of the participants reconnected with his daughter whom he hadn’t seen in years. The projects certainly appear to have a patina of the charitable. Laudable and clever.
As all my students know, I tend to rail against the idea of volunteering for a private corporation. Where a corporation is making a profit by taking the free labour of a human being, it is something akin to slavery. Here BBH isn’t making a profit and the workers are getting paid. But, of course, BBH is a marketing firm and the human hotspots are really more valuable as mobile billboards than they are hotspot salesmen. And, they were getting paid, so certainly the labour wasn’t free unless no one used the service. I am not leading edge in the techno world, but I would have thought that most people have smart phones with connections and that the cost of logging onto their own service would be less than or similar to the suggested donation ($0.13/min). For those people walking around with their ipads and laptops looking for service, maybe it works. Plus, you have to send a text to get access to the system. My failure to understand the techno end notwithstanding, we can, nevertheless, assume that the volunteers or, more accurately, “workers” were to get paid something so weren’t “volunteers” in the true sense. Moreover, subsequent to all the media attention BBH has stated that the workers were guaranteed at least $50.00 per day. (One blog posited that the amount was only $20.)
In the United States the Fair Labor Standards Act requires employers to pay at least the minimum wage, which BBH notes in their blog that they are meeting because they are guaranteeing $50 for 6 hours. Minimum wage inTexas is $7.25. If that is the case, then is there really much of an employment law issue here? That’s not to say that there aren’t other issues such as the criticism about taking advantage of the homeless and the fact that BBH is getting an enormous amount of publicity out of this (let’s face it they’re a marketing company). But this is not the place or time to take on the amount of value that BBH is getting nor of the exploitation of the homeless. The BBH blog does sets out in its defence that they are looking at ways of helping the homeless, they realize they are being cast as villains in this, but they mean only the best. For this post, I’m going to focus on the existence of an employment relationship.
Are the people providing this hotspot service employees, volunteers or independent contractors? The fact that the workers are getting paid may take them outside the domain of volunteerism, but what the relationship is must be determined.
One tribunal set out what an employee is in basic terms:
What are those features which go to make up an employee in the usual sense of the term? Someone is interviewed by an employer and hired for a job. He will work for some period of time and will be paid a fixed wage, computed hourly, weekly or monthly. He will perform tasks assigned by the employer and subject to the direction and supervision of the latter. This work is of benefit to the employer's business or enterprise. For that reason, it is worth the while of the employer to pay for the doing of it. If the work is performed well, it will be so evaluated by the employer, and result in the retention or even promotion of the employee. If the work is not performed well, he will be disciplined and perhaps even discharged, again by the employer.
This is too simplistic a description to meet the requirements in law but it is useful. Applying this description to the human hotspots, it’s unlikely they were interviewed; presumably they volunteered –in the very basic sense of that word that they weren’t forced. But an interview isn’t a legal requirement of an employment contract. An offer is. There must have been an offer somehow – the workers had to find out about it. They had to be selected. They did work for a period of time. They weren’t paid a wage (though paying commissions isn’t illegal under the Ontario ESA-- so to say it must be a wage computed hourly, etc. is also not necessary legally). Was the work to the benefit of BBH? They’re a marketing firm. They’ve managed to garner a huge amount of publicity out of the work. As noted above, if the human hotspots are really billboards or sandwich boards, then very clearly, the work is to the benefit of BBH. The workers performed the tasks assigned. There’s not enough information known as to whether there was supervision or control; there must have been some coordination of who would work where and when – obviously there was some control since they had to wear the shirts and use BBH’s equipment. It’s unlikely that they were evaluated; but would they be subject to discipline? Surely, if one of them were to blog or tweet about BBH being an exploiter of the homeless, presumably they would be discharged. Of course, it would be also be relatively easy to make the opposite argument that they weren’t employees, but rather simply volunteers or participants in a charitable project.
In one case dealing with a charity the Federal Court held: “If the charity makes it clear from the beginning that it cannot afford to pay anyone, then people wishing to give of their time may very well agree to work for it as volunteers.” The focus is on the idea of doing charitable work. The BC Court of appeal in a human rights case also made reference to charitable work or community service work in the context of volunteering and stated:
Given the breadth of volunteer activity in the community, the myriad benefits it can provide and the diversity of motivation, ranging from pure altruism and a desire to "give back" to enlightened self-interest in developing social relationships, experience and training, volunteerism as employment is an important question that remains for another day.
That’s a great description of the starting place to distinguish between employees and volunteers – the motivation. In contract law we refer to this as intention. Intention must always be looked at objectively. What did the workers intend when they took on the role? Did they intend that that their efforts would be serving the greater good somehow? In a case involving the Salvation Army, the court made it clear that the officers of the Salvation Army were there to serve God as their primary motivation or intention, not to work. That motivation may often be easy to see with charitable works. But almost always, when the corporation is a profit making institution, the worker’s intention is to either get paid or earn an opportunity to get paid.
I don’t think any of the workers here intended that walking around Austin providing festival goers with internet access to be a gesture of altruism or a desire to give back; they were doing it for the money. They were working at a 10 day job for which they expected or hoped to get paid.
The next step in determining whether similar activity would make the workers employees here in Ontario, would be to look at the Employment Standards Act. Section 1of the Act provides:
(b) a person who supplies services to an employer for wages,
(c) a person who receives training from a person who is an employer, as set out in subsection (2),
(a) monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied,
(b) any payment required to be made by an employer to an employee under this Act, and
Arguably one doesn’t have to go any further than this definition. The workers are providing services for remuneration. This would definitely be the case if the money paid by the wireless user gets paid to BBH first and then in turn given to the worker.
If the money comes directly from the end user, then it might be argued that BBH is not paying remuneration. Nevertheless, that doesn’t end the issue because if an employment relationship does exist, then section 1(b) further adds that wages are those payments required to be made under the Act. Section 23 of the Act provides that “An employer shall pay employees at least the prescribed minimum wage.” Rather obviously, not paying doesn’t relieve the employer of the obligation to pay. I have heard about restaurants doing this with servers saying that they are volunteers and do not have an employment relationship, but attend for the purpose of getting tips. I haven’t found any cases on this point, but the question of tips has come up in a case regarding Pay Equity. There, the tribunal stated:
. . .the tips are not provided by employers, who are the ones typically responsible for determining the level and nature of compensation, and are certainly the entities responsible for meeting the obligations under the Act. So leaving aside for the moment the question of whether tips in any given situation are “ascertainable”, does the definition of compensation include those payments made by clients or customers who are not obliged to make the payments, have no obligation to meet the requirements of the Act and are essentially strangers to the employment relationship?
In other words an employer can’t meet its obligation under the Act by saying that the wages owed are coming from a 3rd party in the form of tips. Indeed, the ESA expressly excludes tips from the definition of wages so that employers cannot avoid their obligations to pay at least the minimum wage. So the question remains as to whether the employment relationship exists in the first place. If it does, then donations from 3rd parties to the human hotspots would not meet the obligation of the employer to pay the minimum wage over and above the donations.
In interpreting statutes with respect to whether an employment relationship exists, some cases suggest a statutory purpose test be used. It has been said that the purpose of Employment Standards legislation is to avoid exploitation of workers. Given this purpose and the facts around the human hotspots, I would say that the proper interpretation is that they are employees.
Nevertheless, that may not end the debate; an employment relationship may not exist where the person providing the service is an independent contractor rather than an employee. There are a number of tests that the courts use to answer this question. The tests typically set out are: control, four fold, entrepreneur, enterprise/risk, economic realities and statutory purpose. I’ll save a discussion of these tests for another post.
Suffice it to say at this point that in my view, that the threshold would not be met and the workers standing out there in the Austin heat would be employees – even if only for the limited term of 10 days while SXSW runs.