Fact Sheets and Q&As Available for Employers

The United States Department of Labor (DOL) has issued guidanceregarding the meaning and applicability of joint employment under the federal Fair Labor Standards Act (FLSA).

Background
The FLSA requires employers to (among other things) pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. Under the law, it is possible for a worker to be employed by two (or more) joint employers who are both responsible for compliance. This is because joint employment is included in the law’s definition of “employment,” which was written to have as broad an application as possible.

Determining When Joint Employment Exists
According to the guidance, the most likely scenarios for joint employment are:

  • Where the employee has two or more technically separate but related or associated employers. Joint employment exists where two or more employers benefit from the employee’s work and they are sufficiently related to or associated with each other (this is sometimes called “horizontal joint employment” by the courts).
  • Where one employer provides labor to another employer and the workers are economically dependent on both employers. Joint employment also exists where a worker is, as a matter of economic reality, economically dependent on two employers: an intermediary employer (e.g., a staffing agency or other labor provider) and another employer who engages the intermediary to provide workers. (Some courts have called this “vertical joint employment.”)

Responsibilities of Joint Employers

  • Joint employers (whether vertical or horizontal) are responsible—both individually and jointly—for compliance with the FLSA.
  • Joint employers must combine all of the hours worked by the employee in a workweek to determine if the employee worked more than 40 hours and is due overtime pay.

Note: The analysis for determining joint employment under the Family and Medical Leave Act (FMLA) is the same as under the FLSA. For information about how joint employment affects FMLA coverage and eligibility determinations, click here.

Additional resources, including Fact Sheets and Q&As, are available on the DOL’s website.

HR360 Editorial Team http://www.hr360.com

 

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