For Joint Employers, Shared Employees May Mean Shared Liability

The U.S. Department of Labor has released guidance on joint employment under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). This guidance may also be useful for joint employers determining how to comply with Oregon's paid sick time law, which follows the FMLA joint employer regulations.

Joint employment exists when two or more employers are responsible, simultaneously, for compliance with items like overtime compensation under the FLSA, or job-protected leave under the FMLA, for a single employee. For example, joint employment can occur when an employee works for two companies that are separate entities but share operations, such as two different restaurants that share managers, scheduling systems, or payroll functions. Joint employment can also occur when employees are provided to an employer by a third-party staffing agency.

In a joint employment scenario, an employee who works 20 hours in a workweek for one joint employer, and 25 hours for another joint employer, would be entitled to overtime premium pay on 5 hours. Either (or both) joint employers would be liable for any non-compliance with overtime regulations, even though the employee did not work more than 40 hours for either joint employer.

The U.S. Department of Labor has recently declared that protecting workers in joint employment situations is a major focus. Employers that use staffing agencies or that share operational resources with other companies should not assume that compliance issues at the other companies are those other companies' responsibility alone.

More information about joint employment, including the latest guidance, is available from the U.S. Department of Labor. If you are concerned about whether your company is a joint employer, or whether your company could be responsible for another company’s violations, legal counsel should be able to help you find the answer.

Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements.