Job Board Summit Legal challenges 2014?

1. Job Board Summit Legal challenges 2014? kevin.barrow@osborneclarke.com Osborne Clarke - 4 December 2013

2. About Osborne Clarke "the acknowledged experts [in recruitment]." "Osborne Clarke enjoys an outstanding reputation in digital business , enhanced by its international credentials" Legal 500 UK, 2013 • International law firm: 16 offices in Europe and US • Clients • Facebook, Expedia, Amazon, Airbnb • Allegis, Manpower, Matchtech, Harvey Nash, CDI, Yoh, Advantage/Recruit Holdings, Empresaria • 12 jobsites and online exchanges (US, UK) • 2013: co-ordinated industry input on regulation affecting job boards and online exchanges • UK Government • US hirer organisations (Staffing Industry Analysts) • Ipsos Mori/OC Big data gold rush report

3. UK regulatory review 2013-4 re job boards and online exchanges Should they be exempted from UK recruitment regulation? What regulations will remain? Cabinet Office initiative re "barriers to growth" Privacy: US Safe Harbor arrangements will be pulled? Data ownership: ICO comments re social media and recruitment Tax: false self-employment via online exchanges? Issues for job boards and online exchanges in 2014

4. UK regulatory review 2013-4 • Current legislation • Employment Agencies Act 1973 • Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended) – the "Conduct Regulations" • Definitions: • "employment agency" [and "employment business"] – very broad • "except publications …unless wholly or mainly for the purpose of…" • = wide enough to capture online businesses/jobsites[?] • Charging • general prohibition of charges to work-seekers incl self-employed • restrictions on monetisation (cooling off, client accounts etc.) • Checks - identity, qualifications etc. where candidate working with vulnerable • Sanctions - incl. criminal

5. Current legislation designed to regulate (?dodgy/exploitative?) "bricks and mortar" recruiters OC helped jobsites, online exchanges, social and professional networking sites against investigations 2008-2013 Admissions off the record (in the BERR/EASI 2009 consultation and recent EASI investigations) that the regime is out of date 2013 consultation – states that existing laws "have not kept pace with developments in the online sector" (NB in addition: Cabinet Office initiative re "barriers to growth" – 2014) UK regulatory review 2013-4

6. UK regulatory review 2013-4 • Govt said in July 2013 that it would amend 1973 definition of "employment agency/business" so online entities are not caught by the legislation • Draft expected Jan/Feb 2014 – then limited further consultation • If changes that we asked for are implemented, online entities will be: • freed from admin burdens e.g.checks/contracts (without fear of committing a crim offence); • able to charge "subscription" to work seekers and/or offer workers paid-for services (without fear of committing a crim offence); • able to sign off due diligence documents for investors (confirming compliance) without fear AND not face "proceeds of crime" concerns. • BUT possibility that : • a revised def of "employment agency" will be defective, still capturing some online providers • any exemption will be subject to inappropriate bureaucratic conditions • inappropriate new law specifically targeting some aspects of online offerings • charges to workseekers will still be prohibited

7. Suggestions for response Definitions • Expand existing "Publication Exemption"? • New exemptions? • Wording distinguishing between passive and active role in finding work? • Very difficult to draft? What about search engines? • All online is exempt subject to clear notices/satisfaction audits/systems to weed out charges to desperate and vulnerable, and supplies in vulnerable situations? • Specific exemptions • Self-employed? What evidence? • Age? Qualifications? Types of job/pay levels? What evidence? • Other?

8. Issues Monetisation: Financial interest in making of match? Accept categories who should not be monetised – by exception? Qualifications? What evidence? Types of job? What evidence? Age? What evidence? Employed vs self-employed? What evidence? How much should be charged? Some info free? Subject to evidence that real job? What evidence? Suggestion for responseMonetisation of work seeker

9. Current position: CRs prohibit an agency from "introducing or supplying" a work-seeker to a hirer which may involve working with, caring for or attending a "vulnerable person" unless it has obtained certain "confirmations" (or taken reasonable steps etc) Who is a "vulnerable person"? any person who by reason of age, infirmity, illness, disability or any other circumstance is in need of care or attention includes any person under the age of eighteen Suggestion for responseRelax/abolish checking regime

10. Edward Snowden saga – threat to review Safe Harbor scheme used by 3000 US entities Latest EU announcement affects entities with transatlantic data flows including recruiters/job boards New requirements - operational changes by US based entities disclose privacy arrangements with subcontractors eg cloud providers and US law enforcement access investigate false claims of safe harbor progress to be reviewed in Summer 2014 …or US entities must adopt new (more burdensome) measures e.g. "Binding Corporate Rules" Penalties £500k in UK and more elsewhere going up to Euros 1M or 5% of worldwide t/o) Privacy: Safe Harbor arrangements for US entities will be pulled?

11. Social media usage for non domestic purposes Member of staff uses personal networking page for recruitment = non domestic usage = crim offence by worker and employer …as a result of which employers must: stop such activity (as if!) OR assert ownership of employee social media activity (Assertion of ownership is at odds with contractual terms issued with LinkedIn etc.) Data ownership: ICO comments re social media and recruitment

12. Online exchanges often have higher transaction fees than job boards ..and users want an easy payment conduit = some online exchanges act as payment/contractual intermediaries to "control" the relationship/money and to be user friendly Worldwide concerns about false self-employment time based payments? personal service? Liabilities for hirers if tax and social security not deducted US/Germany UK? – changes in 2014 - Chancellor's Statement and HoL Select Committee Industry needs credible payroll expertise Tax: penalties for false self-employment via online exchanges?

13. About Osborne Clarke "the acknowledged experts [in recruitment]." "Osborne Clarke enjoys an outstanding reputation in digital business , enhanced by its international credentials" Legal 500 UK, 2013 • TMT Firm of the Year, 2012 (The Lawyer Awards, UK) • Digital Business & Marketing & Advertising Services Law Firm of the Year, 2012 (Lawyers World Global Awards, UK) • IT Law Firm of the Year, 2012 (JUVE Awards, Germany) • Media Law Firm of the Year, 2012 (JUVE Awards, Germany

14. Questions Thankyou

15. OC team Frances LewisConsultant, T +44 20 7105 7032 frances.lewis@osborneclarke.com Kevin BarrowPartner, T +44 20 7105 7030 kevin.barrow@osborneclarke.com Thomas Leister Partner, Munich T +44 49 89 5434 8064 Thomas.leister@osborneclarke.com