Who’s The boss?: DOL Expands Joint Employer Liability

As previously reported, recent National Labor Relations Board decisions, as well as Occupational, Safety and Health Act (OSHA) actions have significantly expanded the potential for “joint employer” liability. Employers that rely on placement agencies or subcontractors, as well as franchisors, have been placed on notice that they could be responsible for compliance with and violations of the National Labor Relations Act and OSHA, even if they are not an individual’s direct employer.

On January 20, 2016, David Weil, the Wage and Hour Division Administrator, issued an Administrator’s Interpretation affirmatively communicating that the Department of Labor (DOL) will likewise take an aggressive approach in pursuing “joint employers” for violations of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). In a concurrently issued blog post, Administrator Weil stated that joint employment has been and will continue to be a “major focus” for the Wage and Hour Division.

Here are the highlights:

What does this mean for you?  While the Administrator’s Interpretation does not have the force of a regulation or statute, and it is not binding on the courts, it does provide employers guidance on how the DOL will review claims filed against companies who use contingent workforces or who may be interrelated. The DOL will likely continue to ramp up efforts to target businesses that rely upon staffing service companies and subcontractors if those workers are not being paid in accordance with the FLSA/MSPA. In addition, the Administrator’s Interpretation may embolden plaintiff’s attorneys to bring claims on behalf of contingent and shared workers.

Employers should begin evaluating whether they will continue to rely on intermediate employers to provide workers. Employer’s need to be vigilant in addressing claims by contingent staff about unfair wage practices.

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National Law Review, Volumess VI, Number 25