WASHINGTON -- On Jan. 20, 2016, the U.S. Department of Labor’s Wage & Hour Division issued an administrator's interpretation on "joint employment" under the Fair Labor Standards Act (FLSA) and the Migrant & Seasonal Agricultural Worker Protection Act (MSPA) that identifies common scenarios in which two or more employers jointly employ an employee and are thus jointly liable for compliance.
The interpretation pulls together relevant authorities--statutory provisions, regulations, case law and examples--to provide comprehensive guidance on joint employment under FLSA and MSPA so that employers can properly analyze a potential joint employment scenario.
As a result of continual changes in the structure of workplaces, the possibility that a worker is jointly employed by two or more employers has become more common in recent years. In an effort to ensure that workers receive the protections to which they are entitled and that employers understand their legal obligations, the possibility of joint employment should be regularly considered in FLSA and MSPA cases, particularly where the employee works for two employers who are associated or related in some way with respect to the employee; or the employee’s employer is an intermediary or otherwise provides labor to another employer.
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 FLSA and MSPA 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 acts that an employee can have two or more employers for the work that he or she is performing.
The structure and nature of the relationship at issue should determine whether a particular case should be analyzed under horizontal or vertical joint employment, or both.
Joint employment may exist when two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee. This type of joint employment is sometimes referred to as horizontal joint employment.
In a possible horizontal joint employment situation, there is typically an established or admitted employment relationship between the employee and each of the employers, and often the employee performs separate work or works separate hours for each employer. Thus, the focus of a horizontal joint employment analysis is the relationship between the two (or more) employers.
Examples of horizontal joint employment may include separate restaurants that share economic ties and have the same managers controlling both restaurants.
Joint employment may also exist when an employee of one employer (referred to as an “intermediary employer”) is also, with regard to the work performed for the intermediary employer, economically dependent on another employer (referred to as a “potential joint employer”). describing vertical joint employment as possible in circumstances where “a company has contracted for workers who are directly employed by an intermediary company”). This type of joint employment is sometimes referred to as vertical joint employment. The vertical joint employment analysis is used to determine, for example, whether a construction worker who works for a subcontractor is also employed by the general contractor, or whether a farmworker who works for a farm labor contractor is also employed by the grower.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.