Leah M. Stiegler

Leah M. Stiegler
Associate

Victor O. Cardwell

Victor O. Cardwell
Principal and Chairman

Does a temp agency supply workers to you?

Do you contract services like dining or security?

Under the Department of Labor’s new joint employer guidance, you may be a joint employer of a worker whom you thought was the sole responsibility of another company. 

Why does it matter if I’m a joint employer? 

Understanding this situation is key because as a joint employer, you and the other company may both be liable for Fair Labor Standards Act (FLSA) obligations affecting these employees (e.g., using proper exemptions, minimum wage, and overtime). 

How do I know if I’m a joint employer? 

On January 13, 2020, the Department of Labor (DOL) issued new joint employer guidance. In this guidance, DOL adopted a balancing test that considers the following four factors for determining when a company is a joint employer with another company:

Whether the employer exercises the right to:

  1. Hire or fire the worker
  2. Supervise and control the worker’s work schedule or conditions of employment to a substantial degree
  3. Determine the worker’s rate and method of payment 
  4. Maintain the worker’s employment records

No one factor is definitive and each factor is not necessarily given equal weight. Instead, all factors will be considered and weight will be given to each factor depending on the circumstances. This is a very fact-specific analysis.

Can I put in a contract that these workers are not mine? 

Many companies try to include provisions in their temp agency contracts stating the temp agency is the sole employer of the workers. While a good effort, it largely fails. You cannot contract away your joint employment relationship. Instead, the above factors and your company’s conduct that will make that determination.

Does a joint employer have to worry about other laws? 

Yes! A joint employer can be liable for any discrimination or workplace harassment issues regarding that worker. Since discrimination and harassment fall under the Equal Employment Opportunity Commission’s (EEOC) jurisdiction, we must look to the EEOC’s guidance to assess joint employer coverage under these laws. The EEOC’s current guidance is different than the DOL’s. It generally focuses on a company’s control over the worker’s employment.

Many companies overlook their potential obligation to provide reasonable accommodations for temp agency employees with disabilities under the American’s with Disabilities Act.  

Another common law that affects joint employers is the National Labor Relations Act, which deals with unions and union organizing. The National Labor Relations Board and the EEOC are expected to issue new joint employer rules this year, which will hopefully align with DOL’s new rule. 

These are just a few laws that joint employers must consider. Any law that applies to your own employees can apply to these workers if you are deemed a joint employer.

What should I consider when working with another company’s workers? 

Even if you do not have a joint employment relationship for purposes of wage and hour or discrimination issues, there is still a concern about the appearance of these workers as your company’s employees, whether from customers, your employees, or the workers themselves. 

For example, if a worker tweeted something offensive about a religious practice, your company’s reputation could be harmed. However, you have no direct route to disciplining this worker. Furthermore, if one of your own employees did the same thing, you likely would discipline him. Your employee might believe his treatment was unfair, which could lead to claims against your company.

How can I protect my company from claims?

When working with temporary staffing agencies or contract workers, you want to frequently review your contractual provisions. You should address not only wage and hour and discrimination issues, but also the practical concerns regarding the appearance these workers have to your customers, your employees, and the workers themselves.

Determining a joint employer relationship is complicated! Contact the Labor & Employment team if you have questions about your joint-employer status or worker contracts.


For more information about joint employer relationships:

Contact Leah Stiegler at lstiegler@woodsrogers.com.
View Leah's full profile.
Contact Victor Cardwell at cardwell@woodsrogers.com.
View Victor's full profile.