Are You a Joint Employer?
Filed in DOL, Wage Enforcement By David Weil on January 20, 2016
Protecting workers in fissured workplaces - where there is increasingly
the possibility that more than one employer is benefiting from their work
- has been a major focus for the Wage and Hour Division in recent years.
The Wage and Hour Division has always examined employment relationships
during its investigations into possible wage and other labor violations,
and the agency considers joint employment in hundreds of investigations
While we devote significant resources to enforcing labor standards in
order to protect the rights of workers, we also have a commitment to engage
with and educate employers so they know about their responsibilities and
can operate in compliance with the laws that we are tasked to uphold.
That's why today - consistent with that commitment - we've 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 by, for instance,
sharing employees or using third-party management companies, independent
contractors, staffing agencies or other labor providers. We often see
these kinds of arrangements 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 our 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, we 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,
we will continue educating employers about their responsibilities. Last
year, we provided guidance on the misclassification of employees as independent
contractors. The administrator's interpretation that we issued today 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, we will continue to identify
where joint employment applies and to hold all employers responsible.
This guidance provides the analysis that we at the Wage and Hour Division
use to make that determination. 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.
Dr. David Weil is administrator of the department's Wage and Hour Division.