New DOL Interpretation of Joint Employment Further Expands Worker Coverage Under FLSA

Bender's Labor & Employment Bulletin April 2016

David W. Garland, a Member of the Firm and Chair of the firm’s National Labor and Employment Steering Committee, and Jeffrey H. Ruzal, a Senior Counsel in the Employment, Labor, and Workforce Management practice, authored an article in Bender’s Labor & Employment Bulletin titled “New DOL Interpretation of Joint Employment Further Expands Worker Coverage Under FLSA.”

Following is an excerpt:

The DOL’s AI on joint employment is, by careful design, an adjunct to the DOL’s recent Interpretation on independent contractor misclassification, which further reinforces the DOL’s ‘‘tag line’’ that few workers are truly independent of a bona fide employment relationship.

The Interpretation on independent contractor misclassification resulted in many employers foregoing direct relationships with contractors and instead contracting with third parties, such as staffing agencies, to supply their own employees to fulfill business needs. Recognizing this shift, the DOL is now focusing on vertical business relationships in an effort to further expand FLSA coverage over the many businesses that leverage employees of staffing agencies and other third parties (as a reaction to the DOL’s earlier Interpretation on independent contractor misclassification).