Asymmetrical Information - Megan McArdle

01.14.13

Are Adjuncts Full Time Employees?

Thanks to Obamacare, the IRS needs to know

Obamacare was destined to be plagued with a lot of unintended consequences and hard cases.  There's no way a law so sweeping, involving such a large swath of the economy, could avoid it.  Here's the latest:  what to do about adjunct professors.  

Under the new law, which takes effect in January 2014, employees who work at least a 30-hour work week must receive health benefits from their employers. Some colleges are concerned about how to tally up the hours adjuncts spend on the job to determine if they have reached that full-time status. Most adjuncts don't receive health benefits, and the legislation appeared to pave the way for them to finally get access.

The proposed rules, announced in the Federal Register on January 2, don't provide a hard and fast formula for how to calculate an adjunct's workload, but "further guidance may be provided," the announcement says. The agency is collecting comments on the proposal through March 18.

In the meantime, colleges must "use a reasonable method for crediting hours of service," the IRS document says. In the case of an adjunct faculty member, the document adds, it would not be a reasonable method of calculating an instructor's work hours for colleges to take into account "only classroom or instruction time and not other hours that are necessary to perform the employee's duties, such as class-preparation time."

The regulatory state is made for the industrial economy.  Centralized rule-making works best on standardized parts.  Once you introduce a lot of variability, you introduce regulatory discretion--and when you introduce regulatory discretion, you introduce a lot of lengthy wrangling over fairness.  

This shows up most clearly in workforce regulation.  Unions thrived in the mid-century industrial giants that treated people like machine parts.  They have so far mostly failed in the service sector, where each job has all the complexity of any human interaction.  I don't mean to say that these jobs are particularly hard; they aren't, necessarily.  But people are evolved to be extremely good at human interaction.  We easily handle problems that would send a computer into overload.  

The law is like a computer: it relies on very specific rules.  Exceptions and boundary cases give it fits.  Adjunct professors are one of those boundary cases.  They're professionals, not hourly workers, which makes it hard to calculate whether they're full time or part time.  And you can't just declare that all adjuncts are full-time employees, because a lot of them are just teaching part time.  This is going to lead to some messy disputes with the tax authorities.  Stand by for colleges arguing that adjuncts barely lift a pen outside of class, while the IRS and the adjuncts maintain that they slave 16 hours a day, seven days a week.

I suspect that it is also going to result in a fair number of adjuncts getting cut back to whatever number of courses-per-semester that the IRS deems to be indisputably "part time".  Despite spending a fair amount of time researching college costs, I still don't understand why universities and colleges feel that they cannot afford to pay so many of their teaching staff even minimal salary and benefits.  What we know is that whatever their feelings, they have been relying on adjuncts who get paid an absurdly low hourly rate, often without benefits, in exchange for the right to call themselves "professor" and continue seeking a tenure-track job.  

Maybe Obamacare will break the stalemate and colleges will decide to add benefits to the package rather than go through the hassle of managing a larger number of adjuncts.  I can certainly imagine this happening, and it would probably be a net benefit for adjuncts (though would possibly lead to colleges eliminating now-more-expensive adjunct jobs by shifting teaching loads back to tenured professors.)  

On the other hand, I also find it plausible, and somewhat more likely, that colleges will go to great lengths to cut down on the number of full-time-eligible adjuncts.  That probably means teaching loads that cannot support even the extremely minimalist lifestyle of those who are currently adjuncting.  In urban areas, part-time adjuncts can probably string together multiple gigs into something resembling a normal income, at some added cost of stress.  In more rural locations where there are only one or two colleges in driving distance, that probably won't work.  

Whatever happens, unless the universities simply decide to offer a fairly expensive benefit to all their adjuncts without a fuss, we're going to see some convulsions in the tax courts and the classrooms.