After the NLRB Ruling, Is Joint Employment Still a Concern?

What is joint employment - imageLast month in the Hy-Brand decision, the NLRB raised the bar for determining whether a business is a joint employer. So now what? Is joint employment still a concern for businesses?

To paraphrase Tina Fey paraphrasing Sarah Palin paraphrasing Margie in Fargo, Ya! You betcha!

While the recent NLRB decision dropped the alert to Def-Con 4 in labor relations, the joint employment landscape under wage and hour laws is getting worse for employers, not better, thanks to the Fourth Circuit Court of Appeals. Businesses should remain on high alert for joint employment liability under wage and hour law.

Why does joint employment matter (in the wage and hour context)? Because if your staffing agency fails to properly pay its workers, your business is jointly liable under federal wage and hour law. In other words, you pay for their mistakes. It doesn’t matter that you played no role in making those mistakes. If the workers are your joint employees, the FLSA holds you responsible for making sure they are paid correctly for all hours worked.

There are lots of ways staffing agencies can inadvertently violate the Fair Labor Standards Act (FLSA). Here are a few:

  • failure to pay minimum wage
  • failure to pay overtime
  • failure to properly calculate overtime
  • failure to pay for all hours worked (working off the clock)
  • inexact timekeeping practices
  • offsides*

*ok, that’s not true.

The fact that the NLRB made it harder to find joint employment under the NLRA has no effect on the joint employment test under the FLSA.

That’s an important point that businesses should not overlook.

The tests for whether a business is a joint employer are different under federal labor law (NLRA) and federal wage and hour law (FLSA). That means your business might not be a joint employer under the NLRA (e.g., union organizing and bargaining) but, at the same time, can be a joint employer under the FLSA.

In this post, we examined the current standards for determining whether a business is a joint employer under the FLSA. The tests vary depending on where you live. Really. That’s actually true. Even though it’s the same federal law, the interpretation of that law — and its joint employment test — change depending on which state you’re in.

Don’t forget about state laws too. The states impose their own tests for whether a business is a joint employer under their own state laws. California, for example, has AB 1897 (catchy moniker! Can I get that on a t-shirt?), which assumes that staffing agency workers performing work in the usual course of a company’s business are that company’s joint employees, and the business using those workers is strictly liable for the staffing agency’s violations of California’s cornucopia of maddening wage and hour laws.

The bottom line for businesses:  Joint employment is still a big concern. Different laws have different tests. The welcome change in the NLRA standard has no effect whatsoever on the other employment laws, most of which impose joint liability for the mistakes of others.

For more information on independent contractor issues and other labor and employment developments to watch in 2018, join me in Los Angeles on Feb. 27 or Cincinnati on March 28 for the 2018 BakerHostetler Master Class on Labor Relations and Employment Law: A Time for Change. Attendance is complimentary, but advance registration is required. Please email me if you plan to attend, tlebowitz@bakerlaw.com, and list my name in your RSVP so I can be sure to look for you.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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