*** JUNE 7, 2017 THIS ADMINISTRATORS INTERP LETTER WAS REMOVED BY DOL. ***
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. This has been a point of pretty serious confusion for many employers across the nation. The DOL recognized this issue and published an Administrators Interpretation on January 20, 2016. Read on to review the basics of the interp in a Q/A format.
1. Q. What is an Administrator’s Interpretation?
A. The Wage and Hour Division (WHD) constantly seeks opportunities to provide information to the regulated community, in a variety of forms. WHD issues Administrator’s Interpretations, a form of sub-regulatory guidance, when further clarity around the proper interpretation of a statutory or regulatory issue is appropriate.
2. Q. What is joint employment?
A. Joint employment exists when an employee is employed by two (or more) employers such that the employers are responsible, both individually and jointly, for compliance with a statute. Both the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) provide for joint employment.
3. Q. Why did the Wage and Hour Division publish this Administrator’s Interpretation?
A. Through its enforcement efforts, WHD regularly encounters situations where more than one business is involved in the work being performed and where workers may have two or more employers for the work. There are a number of business models and labor arrangements in which the possibility of joint employment exists. The Administrator published this AI to provide additional, detailed guidance concerning joint employment under the FLSA and MSPA in order to assist the regulated community.
This AI reflects existing WHD policy. From their enactment, the FLSA and MSPA allowed for the possibility that a worker may have multiple employers, and the statutes’ joint employment regulations were promulgated decades ago. The guidance provided in this AI is consistent with those regulations, WHD’s investigative and enforcement efforts, and its previous guidance, including fact sheets, Opinion Letters, and AI 2014-2 on joint employment of home care workers in consumer-directed, Medicaid-funded programs by public entities under the FLSA.
4. Q. What are some industries where there might be joint employment?
A. WHD investigators come across employment scenarios where there might be joint employment in all industries, including, for example:
- Home health care agencies that share staff and common management;
- Construction (workers who work for a sub-contractor and possibly a general contractor);
- Agriculture (farmworkers who work for a farm labor contractor and possibly a grower);
- Warehousing and logistics;
- Staffing (providing labor to multiple industries); and
5. Q. Is this AI about franchises?
A. No. This AI is intended for a wide range of industries where a business relies on others to supply the labor that performs the business’ work — that is where WHD is increasingly encountering the possibility of joint employment. The form of business organization, such as a franchise, does not necessarily indicate whether joint employment is present. Indeed, the existence of a franchise relationship, in and of itself, does not create joint employment.
Rather, WHD evaluates all potential joint employment relationships using the same analysis.
Based on our investigative experience, there are many workers, including those who work for a franchised business, who have multiple jobs with multiple employers who are not joint employers. Ultimately, of course, whether a particular franchisee and franchisor jointly employ a worker is based on the facts of each situation and must be made on a case-by-case basis applying the analyses discussed in the AI.
6. Q. Is the joint employment analysis applicable under the FLSA and MSPA the same as the analysis applied by the National Labor Relations Board (NLRB)?
A. The joint employment analysis applicable in FLSA and MSPA cases is not the same as the analysis applied by the NLRB. The NLRB is an independent agency and its decisions are based on a different statute (the National Labor Relations Act) with a different standard for determining joint employment.
Until Next Time, Be Audit-Secure!