Are You My Employer?

(Permission to rebroadcast in whole or in part is hereby granted. A courtesy super or CG crediting the Mackinac Center would be appreciated.)

With shrinking private-sector membership, some labor unions are coming up with creative ways to boost membership in the public sector. In Michigan, one such arrangement places private home-based day care providers in a government employee union. But this novel approach raises a question.

"I do not consider myself to be an employee of anyone," said day care owner Sherry Loar.

Paulette Silverson asked: "Why am I a union member? How can I be a union member? I'm not employed by anyone."

Paulette Silverson and Sherry Loar are talking about their 2008 discovery that they were among 40,000 others in a purported union of people who provide private-sector day care for children.   

The so-called union, Child Care Providers Together Michigan, was formed by AFSCME and the UAW. The "union" gets its dues from Michigan Department of Human Services subsidy payments made to some providers on behalf of qualifying low-income parents.  The department is currently being sued by the Michigan-based Mackinac Center Legal Foundation for withholding these funds. But this bizarre day care union arrangement returns us to Paulette and Sherry's simple and more fundamental question: If they are union members, who is their employer?

How about an entity called the "Michigan Home Based Child Care Council"? The DHS created this government agency through a supposed interlocal agreement with Mott Community College. The union's collective bargaining agreement is with the council. And the union's own lawyer has testified that that the council is the employer.

But home day care business owner Paulette Silverson asked the Michigan Home Based Child Care Council in an e-mail if the council is her employer.

"And they wrote back and said, 'No, you are not an employee,'" Silverson said.

The council's director and board president declined our request for an interview.

But through a Freedom of Information request we asked the council for a list of its employees. The council gave us a list of just two staff members.  This also indicates the 40,000 home day care providers are not the council's employees.

So again, who is the employer?

Since the DHS treats these private business owners and contractors as government employees, and takes "dues" out of human services subsidy checks, is the DHS the employer?

Not according to the agency's website.

For instance, some day care providers eligible for the DHS subsidy must agree that "... the parent (or) substitute parent is my employer (not DHS)."

Others, such as a grandparent caring for a grandchild, must agree that they are "considered to be self-employed and not an employee of DHS."

But if the day care providers aren't employees of the DHS, are they employees of some other state agency?

Not according to a union lawyer who testified at a legislative hearing last October.

According to Nick Ciaramitaro, "They are not employees of the state."

Or a person manning the front desk at AFSCME headquarters in Detroit, who said: "I know they're not state employees. But who they work for, I'm not sure."

So is anyone else the employer?

Perhaps Mott Community College, the other party to the interlocal agreement that created the council. But in January, a spokesperson told us Mott does not employ home day care providers, union or otherwise.

So Mott Community College is not the employer.

The Department of Human Services is not the employer.   

Another state agency is not the employer.

The Michigan Home Based Child Care Council is not the employer. 

Where does that leave home day care providers?   

When asked whether "They ended up in a government employee union no clear-cut employer," Patrick Wright, director of the Mackinac Center Legal Foundation replied: "Exactly. With no clear cut employer at all, because the people who are paying them the money are the parents."

The providers themselves agree. Loar said, "I actually work for my parents and my children."

Kathy Hoekstra is a communications specialist at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited. Click here for more on the Mackinac Center lawsuit, Loar v. DHS.