Disco Meets “Permanent Temps”: NLRB Decides a New Joint Employment Issue

disco-297670__480On New Year’s Eve, Sister Sledge will be playing at the Seminole Casino in Coconut Creek, Florida. (You can buy tickets here.  You’re welcome.) The sisters will, of course, play the 1979 single, “We Are Family,” which is a disco song that it’s ok to admit you like. I don’t know what else they’ll play though.  It could be a long night.

“We Are Family” is also what happens when a company retains staffing agency temps for so long that they become, in that company’s words, “permanent temps.” It’s joint employment deluxe.

A recent decision by the NLRB examines what happens when a joint employer fails to apply a collective bargaining agreement to those “permanent temps.”

Orchid Paper Products Company in Pryor, Oklahoma, produces — wait for it — paper products. Their workforce is unionized and they make frequent use of staffing agency temps. The temps frequently remain on-site for long periods of time, at which point they acquire the status of “permanent temps.”

These workers are supervised and controlled by Orchid Paper, even though they are paid by their staffing firm. The Board found that under any test — Browning-Ferris or otherwise — they are joint employees.

One consequence of being a joint employee in a union environment is that the joint employer, Orchid Paper, has to follow the requirements of the collective bargaining agreement (CBA) as to those workers, even though they’re staffing agency workers. When Orchid Paper failed to follow the CBA as to those workers, it engaged in an unfair labor practice. So far, no big surprise.

The issue to be decided here, though, was the scope of the remedy that could be imposed.

As a result of an unfair labor practice, could the Board order a a remedy that held Orchid Paper to the entire CBA for its temps?

The Board said no, ruling that only certain parts of the CBA can be applied. In other words, “We Are Family, but Maybe Only Like Third Cousins.”

The Board ruled that an order intended to remedy an unfair labor practice had to be limited. The Board could only order the joint employer to apply the CBA provisions to the joint employees that related to the working conditions that Orchid Paper controlled.

My research in preparing this blog revealed that Sister Sledge, in fact, had two other Top 20 hits in 1979 — “He’s the Greatest Dancer” and “Lost in Music.” Those of you who remember those two songs will thoroughly enjoy the New Year’s Eve Show. Bring your platform soles.

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

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Amazon Users (espec. Cindy, Amy & kris), Please Don’t Submit Comments On the NLRB’s Proposed Joint Employment Rule

Joint employment rule NLRB comment period extended

Amazon has a popular feature that allows users to post questions about a product, and then anyone can then post an answer. But is that really such a good idea?

Should literally anyone be allowed to post a comment? Allow me to introduce you to Cindy C., who recently purchased an ice machine and is (I think) trying to be helpful to others who are considering purchasing the same brand of ice machine:

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Thank you Cindy. Not a helpful comment. If you decide to try the extension cord, first get out of the bathtub. Otherwise, the next post containing your name could be here.

Then there’s Amy N., who has neither Alexa nor an ounce of common sense:

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Thank you Amy N. It’s really nice to hear from you and, best of all, now I know what to get you for Christmas!

Then there’s my favorite user comment, courtesy of kris:

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Dear kris, we didn’t think that you did. And we still don’t. Not this thing or any other thing. You may resume finger painting.

Amazon is not the only democratic institution that invites all living, breathing creatures to provide public comments.

As we’ve written here, the NLRB is pursuing the administrative rulemaking process to craft a new definition of “joint employment.” As part of that process, there is a public comment period, during which anyone (even kris) can post a comment about the proposed rule.

So far, there have been about 8,000 comments posted, many cribbed from a cut-and-paste pro-union comment drive that invites adherents to write, “Dear _, I strongly oppose….” Many other comments, fortunately, include well-considered and thoughtful opinions, both for and against the rule. It’s the thoughtful comments that are the most helpful, kris.

The NLRB has extended the comment period through January 14, 2019, with an additional reply period through January 22 in which people can reply to a previously posted comment.

If Amy N. asks, comments may only be submitted via Alexa.

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

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Happy Birthday, Rudolph! (You’re Still Just a Temp.)

Temporary workers rudolph reindeer employment law

At age 79, Rudolph is the youngest of Santa’s reindeer, having been created in a promotion for the Montgomery Ward department store in 1939. While he reliably shows up every December, Rudolph is still just a seasonal hire, presumably grazing with his caribou cousins somewhere in Lappland or Siberia the rest of the year.

Seasonal hires, or temps, present special problems. There are different kind of temps.

Temps retained as W-2 employees are regular employees, even if only retained for a short period of time.  Regular employment rules apply.

Temps retained through staffing agencies are a little different, but not much. They are likely joint employees of both the worksite employer and the staffing firm.  They likely take direction and supervision from the worksite employer and work side-by-side with the worksite employer’s regular employees.  These characteristics are generally signs of joint employment.

What is the impact of joint employment? Potentially none, but if the staffing agency does not properly pay its employees, the worksite employer may be on the hook. It is critical to ensure that hours are properly recorded and the staffing firm is reputable and reliable in its pay practices.

The use of temps can be a tremendous help during the holiday season, like having a luminous red headlight for a nose when delivering toys via sleigh.  Just be sure to tighten all the reins before taking off.

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

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What is Joint Employment?

What is joint employment

Despite the spread of marijuana legalization initiatives, the term “joint employment” has nothing to do with edibles, 4/20 day, or the prevailing aroma at a Jimmy Buffett concert. Joint employment simply means that more than one entity is a worker’s employer — at least under some applicable law.

In joint employment there is usually a primary employer and a secondary employer. The primary employer, for example, could be a staffing agency. The staffing agency pays the worker, onboards the worker with tax and immigration forms, and assigns the worker to a worksite. The secondary employer is the company where the staffing agency worker performs the services. It’s the company that most directly benefits from the work being performed.

Even though the secondary employer expects the primary employer (the staffing agency) to pay a minimum wage, to properly calculate and pay overtime, and to provide other benefits to its primary employees, a secondary employer can be held liable if the primary employer drops the ball. If the ball dropping is a violation of the law — for example, the primary employer didn’t properly pay overtime — then both joint employers can be held liable.

Joint employment is a backup plan for what happens when the primary employer doesn’t do what it’s supposed to do. If Staffing Agency A goes bankrupt and doesn’t pay wages, or if it miscalculates overtime, or if it doesn’t pay for off-the-clock work, both Staffing Agency A and Company B can be deemed joint employers. As joint employers, either company can be held fully liable when a worker doesn’t get what the law says he or she should get.

Let’s digest that for a moment: That means a joint employer can be held responsible for wage and hour violations even when it has no control over how the primary employer runs payroll or calculates worker pay.

In other words, being a joint employer can mean getting punished for things you didn’t do — and weren’t expected to do. As we explained here, it’s like taking steroids by accident.

That hardly seems fair. But it’s the law, intended to protect workers and to ensure there are deep pockets somewhere to ensure the worker is properly compensated for work performed.

So do you want to avoid joint employment? Not necessarily.  Joint employment by itself is not against the law. It is not illegal to be a joint employer.  Joint employment becomes a problem only when the primary employer didn’t treat its employees as the law requires. The law doesn’t care who was supposed to do it. In a joint employment situation, both companies are responsible.

That’s why a detailed contract is so important when engaging a staffing firm to supply employee labor. Contracts with staffing agencies should clearly spell out which company is responsible for what. You can read more here about common deficiencies in off-the-shelf staffing agency contracts. Those agreements generally need to be beefed up to provide proper protection.

How do you know if you are a joint employer? That’s (unfortunately) a tougher question to answer. The test for Who Is a Joint Employer? varies state-by-state, law-by-law. Here is a map showing the current chaos and inconsistencies in the tests. Several previous blog posts address the various tests being used and how these tests continue to develop. We’ll continue to post frequently on developments in joint employment, which is one of the focal points of this blog.

For now, my best non-legal advice is: Subscribe to this blog!

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

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Notification by Telex? Time to update your forms!

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Thank you Wikipedia, You know everything, making me feel so inadequate.

I recently edited a form agreement that allowed for notification “by facsimile or telex.” I deleted “telex” because, well, does telex even exist anymore? I then sent my edits back to the lawyer on the other side.

The other lawyer put it back in!

I then suggested he provide his client’s telex exchange and I asked if we could borrow his 50 baud modem and telex equipment to facilitate communications, because, um, our local antique store was fresh out of telex equipment. (I considered pushing back and insisting that all communications be in morse code but resisted. I admit to feeling pangs of regret that I didn’t push harder for the dashes and dots.)

People, update your forms!

If your independent contractor agreements and staffing agency agreements have not been reviewed since the widespread adoption of horseless carriages, it’s time for a fresh look. The risks of joint employment and independent contractor misclassification are real, and old forms almost definitely do not contain the types of clauses your business needs to protect itself.

For contracts with suppliers of labor, is your vendor accepting sole responsibility to do all of the things that employers must do, including hiring, firing, supervising, withholding taxes, tracking hours, and about a dozen other important tasks? Under many laws, you’re jointly liable if they fail, so you need robust contractual representations to shift liability.

Does your contract include sufficient insurance requirements and specific enough indemnity provisions to protect against a joint employment or misclassification claim?

Does your independent contractor agreement have specific descriptions of the types of control your business can and cannot exert? If you are not disclaiming the right to control a list of items, you’re missing a prime opportunity to turn the contract into strong evidence in your favor, in the event of a misclassification challenge.

For those of you, like me, who wouldn’t have the first clue how to telex someone, here’s what I learned on Wikipedia:

The telex network was a public switched network of teleprinters similar to a telephone network, for the purposes of sending text-based messages. Telex was a major method of sending written messages electronically between businesses in the post World War II period. Its usage went into decline as the fax machine grew in popularity in the 1980s.

The “telex” term refers to the network, not the teleprinters; point-to-point teleprinter systems had been in use long before telex exchanges were built in the 1930s. Teleprinters evolved from telegraph systems, and, like the telegraph, they used binary signals, which means that symbols were represented by the presence or absence of a pre-defined level of electric current. This is significantly different from the analog telephone system, which used varying voltages to encode frequency information. For this reason, telex exchanges were entirely separate from the telephone system, with their own signalling standards, exchanges and system of “telex numbers” (the counterpart of telephone numbers).

Telex provided the first common medium for international record communications using standard signalling techniques and operating criteria as specified by the International Telecommunication Union. Customers on any telex exchange could deliver messages to any other, around the world. To lower line usage, telex messages were normally first encoded onto paper tape and then read into the line as quickly as possible. The system normally delivered information at 50 baud or approximately 66 words per minute, encoded using the International Telegraph Alphabet No. 2. In the last days of the telex networks, end-user equipment was often replaced by modems and phone lines, reducing the telex network to what was effectively a directory service running on the phone network.

Keep your telex handy, my friends. You never know when you might need one — by contract.

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

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What does the NLRB’s Proposed New ‘Joint Employment’ Rule Mean for Businesses?

360 degrees joint employment NLRB new rule

True story. Late 1980s. Early days of fantasy baseball. One of my high school buddies — we’ll call him The Beast — finishes last but decides he’s ready to turn things around. The Beast stands up at the next year’s draft and announces his new team name, intending to show us that he’s about to reverse last year’s standings: 360 degrees.

No one had the guts to say it. Only later did someone tell him he probably meant 180 degrees. He finishes last again. The Beast no longer plays fantasy baseball but lives a comfortable life as a tax lawyer in Florida.

A complete turnaround may now be in the works when it comes to defining “joint employment.” Recent actions by the National Labor Relations Board signal an upcoming 180-degree shift.

Click here to read the rest of the story, recently published in Westlaw’s Journal Employment and Practitioner Insights.

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

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New Definition of Joint Employment Still Appears Likely, Despite Efforts to Smack NLRB Chair in Face with an Octopus

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When this kayaker was slapped in the face by an octopus wielded by a seal, he just laughed it off. It didn’t seem to hurt, and I guess that’s just a thing that seals sometimes do.

Q. Now, Lebowitz, how are you going to work that intro back into something related to joint employment?

A. Watch this!

Similarly, it didn’t take long after the NLRB proposed a new regulation that would redefine joint employment (see this post) for two prominent Democrats to try to octo-seal-slap the NLRB’s Chair into backing off. Not gonna happen. The Board will not abandon its kayak.

Last week, Senator Patty Murray and Representative Bobby Scott sent a letter to Board Chair John Ring, arguing that there is “scant research or analysis” to support the Board’s call for a new joint employment standard. Um, so everything in the joint employment world has been peaches and cream? Heck, there’s so much uncertainty in the joint employment world right now that someone could devote a whole blog just to that topic!

In an effort to stall the rulemaking process, Murray and Scott asked the Board to extend the comment period on the proposed new rule by another 60 days (because no one saw this coming?) and demanded that the Board produce of all sorts of records relating to joint employment cases filed over the past several years. They also tried to re-raise concerns that there might be a conflict of interest affecting two of the three Republican Board members. The letter demanded the production of 21 categories of documents within 12 days, including asking for the name and case number of every joint employment case during the past six years fitting into various categories.

Let’s be realistic. This letter is basically outreach by Sen. Murray and Rep. Scott to labor unions, showing that they’ve got their back on the joint employment issue (to the detriment of businesses). I expect the letter will have no real effect on the process for rulemaking or on the timetable for adoption.

While few people may read that letter, the Go-Pro video of the seal smacking the kayaker in the face with an octopus has received a boatload of hits. I highly recommend watching. It is far more entertaining than this blog.

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

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