Yesterday, the United States Department of Labor (DoL) issued new guidance on joint employment — that is, when more than one business is involved in the work being performed by a particular employee.
This is an increasingly common phenomenon in today’s economy, especially in the construction, agricultural, janitorial, logistics, staffing, and hospitality industries. Employers in these and other industries frequently share employees and use staffing agencies, independent contractors, and third party management companies. All of these scenarios raise the possibility that a business is a “joint employer” of a particular worker.
Why would that matter? When two or more employers jointly employee a worker, that employee’s hours are aggregated for purposes of overtime and other purposes. Moreover, when there are joint employers, each is individually and severally liable for compliance with state and federal wage and hour laws. So you could be paying that jointly employed worker incorrectly. Or, even if you are paying the worker correctly and playing “by the rules,” you could still face liability due to the other employer’s failure to do the same.
Find out if your business is potentially considered a “joint employer” by reviewing the DoL’s new guidance, known as Administrator’s Interpretation No. 2016-1. You can find the publication here.