While the D.O.L devotes significant resources to enforcing labor standards in order to protect the rights of workers, the D.O.L. also engages with and educates employers so they know about their responsibilities and can operate in compliance with the laws. To help employers the Wage and Hour Division issued guidance on joint employment in the form of an administrator’s interpretation.
What is joint employment?
In a nutshell, joint employment exists when a person is employed by two or more employers such that the employers are responsible, both individually and jointly, for compliance with a statute.
The Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act share the same definition of employment. This definition, which includes “to suffer or permit to work,” was written to have as broad an application as possible. Under these laws, it is possible for a worker to be jointly employed by two or more employers who are both responsible, simultaneously, for compliance. It is a longstanding principle under both the FLSA and MSPA that an employee can have two or more employers for the work that he or she is performing.
Is the frequency of joint employment situations increasing?
Yes. Economic forces and technological advancements have been changing the nature of work for a long time. As a result, more and more businesses are changing their organizational and staffing models; for instance, sharing employees or using third-party management companies, independent contractors, staffing agencies or other labor providers. These types of arrangements are common in the construction, agricultural, janitorial, distribution and logistics, staffing, and hospitality industries. The growing variety and number of business models and labor arrangements have made joint employment more common and the need to address it more pressing.
Last summer, for example, a federal court in Seattle sided with the department in ruling that DirecTV was a joint employer of the installers hired by its contractor, resulting in DirecTV paying $395,000 in back wages and damages for minimum wage and overtime violations. And in October, the D.O.L. announced that J&J Snack Foods Corp. would pay $2.1 million in back wages and damages to temporary production line workers hired by two staffing firms that J&J contracted with to provide labor.
Guidance to employers
As the fissured workplace continues to impact employment relationships, the D.O.L. will continue educating employers about their responsibilities. Last year, the Wage and Hour Division provided guidance on the misclassification of employees as independent contractors. The administrator’s interpretation addresses who is an employer, pulling together relevant authorities – statutory provisions, regulations and case law – to provide comprehensive guidance on joint employment under the FLSA and MSPA. The administrator’s interpretation reflects existing policy, and provides all stakeholders with clear guidance, including examples of how WHD considers joint employment in its enforcement of these laws.
Upholding a fair day’s pay for a fair day’s work
As the workplace continues to fissure, and as employment relationships continue to become more tenuous and murky, the D.O.L. will continue to identify where joint employment applies and to hold all employers responsible. This article helps illustrate the analysis the Wage and Hour Division uses to make determinations. For employers, it can serve as a road map to compliance so that labor violations can be prevented and workers will receive the hard-earned pay to which they are legally entitled.
Credit: Dr. David Weil.