DOL Speaks On Joint Employer Relationships

600px-US-DeptOfLabor-Seal_svgThe U.S. Department of Labor (DOL) has issued guidelines for when companies will be considered joint employers for purposes of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). This guidance was issued in the wake of the National Labor Relations Board’s crucial Browning-Ferris ruling this past summer, drastically expanding who may be considered a joint employer under the National Labor Relations Act (NLRA).

The DOL guidelines discuss in detail a wide variety of employment relationships, including shared employees, subcontracted employees, staffing agencies, third-party management companies, and others. According to the DOL, the “possibility of joint employment should be regularly considered in FLSA and MSPA cases, particularly where (1) the employee works for two employers who are associated or related in some way with respect to the employee [i.e. horizontal joint-employment]; or (2) the employee’s employer is an intermediary or otherwise provides labor to another employer [i.e. vertical joint employment].” Although not new, the guidelines set forth in detail various factors to be used in determining joint employer status.

As with the Browning-Ferris decision, the DOL guidance is particularly important for companies that work with subcontractors or staffing firms, or are themselves contractors or staffing firms. These companies, as well as others in similar relationships, should carefully review the guidelines, weigh the benefits of control against the risk of being deemed to be a joint employer, and reflect their desired balance in their contracts, practices and procedures.

 

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