CHAPTER 12

Private Employment vs. Public Employment

In this chapter, we will be discussing the differences for individuals working in the private and public sectors, as well as working for nonprofit organizations. There are employment pros and cons for individuals to consider, which we will discuss below. We will also discuss the ways constitutional protections impact employment in the different sectors.

PRIVATE-SECTOR EMPLOYMENT

Some positions in the private sector can afford greater professional growth. This, of course, is dependent upon the type of position and the company for which you work. Private employers are able to put greater restrictions upon their employees (such as speech restrictions, expression restrictions, etc.) than the government.

Working for Larger Private Businesses

Advantages

Generally, working for larger private businesses has a number of incentives. The room for professional growth is greater than in comparable positions in small businesses and the government. Employees working with these types of companies often have higher earning potential and more room for upward mobility within the company. Many times, larger corporations provide employees with the opportunity to specialize in the work they do, so employees develop a very specific skill set. Frequently, larger companies are also able to provide their employees with larger benefit packages than smaller businesses and nonprofit organizations. Larger companies also generally provide greater stability for their employees than nonprofit organizations or smaller businesses because of the larger economic resources these businesses have.

Disadvantages

As mentioned above, the skill sets of employees can be very specialized in order to be more efficient. While this can be an advantage in working for a larger company, it can also be limiting in the breadth of skills developed by employees. Additionally, working for a large corporation can mean working longer hours, because the bottom line is especially important to these types of companies. Some employees in this type of company may also feel as if they are merely a “cog in a machine,” because there are so many other employees serving similar functions. Another problem is that the hours worked by these employees may be longer than employees in the public sectors performing a comparable job.

Legal aspects of working for a larger company

Many federal employment laws and regulations apply to businesses depending upon how many employees the business has, varying from businesses with fifteen or more employees (for the Americans with Disabilities Act and Title VII of the Civil Rights Act) to businesses with a hundred or more employees (for the Employer Information Report EEO-1 and the Workers Adjustment and Retraining Notification Act). See Appendix B. Certain federal laws apply to all employers regardless of the number of employees, including the Equal Pay Act, Fair Labor Standards Act, Occupational Safety and Health Act, Immigration Reform and Control Act, and the Employee Retirement Income Security Act. Another protection available for all employees regardless of company size is protection for “whistleblowers,” individuals who identify and complain about legal problems. It should be noted that most states have additional laws and regulations to protect employees. For this reason, it is important for you to determine what state laws are available in the state where you are employed. This information should be available online by googling “Employment law in (your state).”

Working for Nonprofit Organizations

A nonprofit organization is an organization that is created by state law and does not have owners. Instead, a nonprofit organization is, as the name implies, created so that it does not realize a profit, but nevertheless provides benefit to society or specified groups. A nonprofit organization customarily accounts to the state attorney general and is regulated by state law. Most nonprofits are exempt from federal taxes and state tax. Working for a nonprofit organization can be a rewarding experience if the mission of the organization strikes a chord with your values. However, there are some considerations that you should take into account if you are planning to work for a nonprofit.

Advantages

Many individuals who work for a nonprofit do so because of the mission attached to the organization. This can be a draw for people who hope to make an impact on their community or who have a drive to solve a perceived problem in society. For these types of individuals, the reward in making a difference can make up for the disadvantages in working for a nonprofit listed below.

Additionally, nonprofits frequently give their employees the opportunity for greater professional growth because their employees often juggle more projects than their counterparts in the other sectors. For this reason, these employees tend to gain hands-on experience rather quickly. Because many nonprofits are structured in the same way as business entities, the experience gained in working for them is transferrable to a for-profit organization at a later time.

Disadvantages

Nonprofit organizations are not structured to make a profit (as is clear in the name); therefore, the future for a nonprofit organization, particularly a newly formed nonprofit, can be uncertain. As a result of this, many nonprofit employees are overworked and earn less than they would in a comparable position in the business or government sectors. Nonprofits also have specific bureaucratic requirements to maintain their funding, which can make the job more difficult for employees. Because of these factors, nonprofit employees often burn out more quickly than employees in other situations. Additionally, because of the financial nature of nonprofit organizations, an important aspect of working for a nonprofit is the necessary fundraising to keep the organization operational. Of course, the vast majority of nonprofits are structured so that donations made to them are tax-deductible. This benefit is frequently used as an incentive and specialists are frequently employed to assist nonprofits in their fundraising activities.

Legal aspects of a nonprofit

As mentioned above, there can be federal and state laws and regulations specific to nonprofits that can apply for actually running a nonprofit organization. With regard to employment laws, the same laws listed the previous section apply. If you are founding a nonprofit organization or work for a nonprofit organization and have questions, you should work with an experienced attorney to explore your options and be sure that you are complying with state and federal law. You may also wish to consult The Law (In Plain English) for Nonprofit Organizations.

Working for Small Businesses

Advantages

There are numerous advantages in working for a small business. These include the ability to obtain broader opportunities, because, with fewer employees, everyone must perform several tasks. In addition, employees of small businesses have the potential to “grow” as the business grows, and most small business employees personalize their job. Small businesses often have a familylike atmosphere so that employees in those businesses tend to be more engaged by their work.

Disadvantages

Unfortunately, small businesses are often undercapitalized and, therefore, employees may earn less for the work they perform. Because small businesses have fewer employees, the hours worked may be longer and the working conditions may not be as appealing. The benefits available for employees of small businesses may also be leaner than those available for employees in larger businesses or the government. Despite these issues, many individuals prefer to start their careers by working for small businesses, because there is a greater potential for personal and professional growth.

Legal Aspect of Working for a Small Business

As noted above, many of the protections afforded to individuals by federal and state law are dependent upon the number of employees working for a business. If the company you work for does not meet the minimum numbers required by these laws, the company does not have to provide those protections.

PUBLIC-SECTOR EMPLOYMENT

Constitutional Rights of Federal, State, and Municipal Employees

The US Constitution and state constitutions application to employment is limited to those employees in the “public sector” including federal, state and municipal employees unless some form of state action is involved in private-sector employment. Public employers are required to follow all federal laws, and state and municipal employers are required to follow all state laws in their respective state. Constitutional rights are applicable to public-sector employees’ privacy, termination from employment as a deprivation of a property right in the form of employment, and rights of free speech and association.

Free Speech and Public Employment

Public employees are not afforded total free speech protection in the scope of their employment, though the government cannot prohibit speech to the same extent as private employers. The US Supreme Court has evaluated the free speech rights of several types of public employees, including teachers, law enforcement officials, and public officials. A two-step analysis was adopted by the court for determining whether a public employee’s speech is protected. The first step is to determine whether the employee was speaking as a private citizen. If the employee was not speaking as a private citizen, then the second step is to determine whether the governmental entity has a sufficient reason to treat its employee differently than it treats members of the general public. Examples of this are military members being prohibited from making political statements while in uniform and governmental employees (such as assistant district attorneys) using their platform to criticize elected officials.

Advantages

The advantages of public employment are the fact that there is job security because the government is not likely to go out of business. In addition, the benefits provided by government employment are extraordinarily broad, including numerous days off, medical benefits, pension benefits, educational benefits, and numerous other benefits depending upon which branch of the government and which level of the government is the employer. Another benefit is the fact that most government employees have very stable and fixed hours, which rarely, if ever, change. Government employees can be terminated for cause, but, unlike private employees, they are rarely, if ever, terminated without cause.

Disadvantages

The disadvantages for working for the government are the fact that the opportunities are limited, because salaries are scheduled and not based on increased profit. In addition, requirements for positions and promotions are fixed by formulas and an employee’s potential for job growth is limited. Salaries are frequently capped, and government employees are limited in their potential financial growth. Government employees rarely, if ever, have the ability to be independent, and they are required to follow fairly strict guidelines for their positions. Despite these issues, many individuals are willing to exchange the stable position afforded by public employment for the others that may be available in the private sector. This is particularly true for individuals with young families, with medical problems, and individuals who are nearing retirement.

In this chapter, we discussed some of the pros and cons of working in small businesses, large businesses, nonprofit organizations, and for the government. We have also identified some of the numerous federal and state laws that apply to these employment situations. It is important for you to understand these differences and use the information provided in this chapter to assist you in selecting a position when appropriate, either to begin employment or change positions. It is also important for you to be aware of the laws that apply to your position if problems arise. Certainly, it is essential for you to work with an experienced attorney if and when you encounter any employment problems. In fact, the earlier you commence working with a lawyer in an employment-related dispute, the more likely you are to obtain the maximum benefit available to you.