WASHINGTON D.C. — On January 20, 2016, the Wage and Hour Division of the U.S. Department of Labor issued guidance on joint employment under the Fair Labor Standards Act (FLSA). The guidance will assist employers and employees determine whether a joint employment situation exists — whether an employee is employed by two or more joint employers who are both responsible for compliance with FLSA. The guidance provides two most likely scenarios for where a joint employment relationship exists.
Scenario 1: Where the Employee has Two or More Technically Separate but Related or Associated Employers
Under this scenario, a joint employment exists where two or more employers benefit from the employee’s work and they are sufficiently related to or associated with each other. These situations involve those employers who have an arrangement to share the employee’s services, where one employer acts in the interest of the other in relation to the employee, or the employers share control of the employee, directly or indirectly. Where control of the employee is shared, this may occur when one employer controls, is controlled by, or is under common control with the other employer.
This scenario focuses on the degree of association between the two or more employers, and it is sometimes called horizontal joint employment by the courts. The facts that are most relevant are who owns or operates the possible joint employers, whether the employers have any overlapping officers, directors, executives, or managers, whether the employers share control over operations, and whether the operations of the employers are intermingled.
Scenario 2: Where one Employer Provides Labor to Another Employer and the Workers are Economically Dependent on Both Employers
With this scenario, joint employment is considered to exist when a worker is economically dependent on two employers: an intermediary employer such as a staffing agency, and another employer who engages that intermediary to provide workers. This type of joint employment relationship is common in industries that use subcontracting, staffing agencies, or other intermediaries such as construction, warehouse and logistics, and hotels. The question considers several factors to determine the economic realities of the relationship, such as whether the other employers directs, controls, or supervises the work, whether the other employer has the power to hire or fire the employee, or how permanent the relationship is between the employe and the other employer.
Under FLSA, each of the joint employers must ensure that the employee receives both minimum wage and overtime. Furthermore, joint employers must combine all of the hours worked by the employee in a workweek to determine if the employee worked more than forty hours and is due overtime pay.
The joint employment guidance from DOL can assist employees in determining which employer rightfully owes the obligation to pay minimum wage and overtime. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you believe that your joint employers has deprived you of your wage rights under FLSA. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your joint employers. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.