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Department Of Labor Issues New Guidance On Joint Employment

On January 20, 2016, the Department of Labor (“DOL”) issued Administrator’s Interpretation No. 2016-1, which provides guidance on when employers may be jointly liable for violations of the Fair Labor Standards Act (“FLSA”) and the Migrant Seasonal Agricultural Worker Protection Act (“MSPA”).

The employment relationship is defined very broadly under both the FLSA and the MSPA and both pieces of legislation specifically provide that an employee may be employed by two or more employers at the same time. As such, the DOL has taken the position that it will interpret the concept of joint employment expansively rather than using the more restrictive common law control test.

According to the DOL, joint employment can arise in two ways. First, joint employment may occur where an employee has employment relationships with two or more employers who are technically separate but who are related. In determining whether joint employment exists, the DOL will focus on the relationship between the potential joint employers. For example, a waitress who works for two restaurants that are operated by the same person or entity may be considered a joint employee of both restaurants. The waitress’s hours worked at each restaurant would need to be aggregated for purposes of calculating overtime hours. Both restaurants would be jointly and severally liable for compliance with the FLSA and the MSPA.

Second, joint employment may also occur where an employee has an employment relationship with one employer but the economic realities reveal that the employee is economically dependent on, and thus employed by, another entity involved in the work. In determining whether joint employment exists under this test, the DOL will focus on the relationship between the employee and the potential joint employers to determine if the economic reality results in the employee being an employee of both the intermediary employer and the employer. In determining the economic reality between potential joint employers, the DOL considers the extent of the potential joint employer’s direction, control, and supervision of the work performed, the general employment conditions of the employee, the duration of the employment relationship, whether the work being performed is repetitive and requires little or no training or skill, and whether the work is being performed on the premises of the potential joint employer. For example, a nurse who is placed at a hospital by a temporary staffing agency would likely be the joint employee of both the staffing agency and the hospital.

What Does This Mean For You? Joint employers are jointly and severally liable for FLSA and MSPA violations, which means that either employer may be held liable for the full amount of any damages. Therefore, employers should regularly monitor whether their employees are employed by another entity that may result in a joint employer relationship. If so, employers should make sure their contracts with other joint employers account for liability that may result from the joint employer relationship.

If you have any questions about this or any other employment or labor law issue, please contact Whitney Rahman at (717) 509-7237 or swr@blakingerthomas.com or Grace Nguyen Bond at (717) 509-7226 or gcnb@blakingerthomas.com.

**This update is provided for informational purposes only and
should not be construed as legal advice or as creating an
attorney-client relationship where one does not already exist**