The DOL Focuses on Joint-Employer Liability

Employee Relations Law Journal Spring 2017

Jeffrey H. Ruzal, a Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, authored an article in the Employee Relations Law Journal, titled “The DOL Focuses on Joint-Employer Liability.”

Following is an excerpt:

The Department of Labor (DOL) issued Wage and Hour Division Administrator’s Interpretation 2016-1 (AI), which provides that businesses that use employees of third parties may be considered “joint employers” of those workers for purposes of compliance with the Fair Labor Standards Act (FLSA). The genesis of the joint-employment AI is the DOL’s expectation that businesses may seek to avoid the high costs and potential liabilities of maintaining their own employee workforce.

Although this AI is about a year old, there are longstanding federal regulations on joint employment stating that when the employee performs work that simultaneously benefits two or more employers, or works for two of more employers at different times during the workweek, a joint-employment relationship generally will be considered to exist in situations where, (1) employers share an employee’s services, (2) one employer acts in the interest of the other employer in relation to the employee, or (3) one employer controls the other employer and therefore shares control of the other employer.

The DOL’s AI on joint employment goes far beyond the streamlined regulations in explaining the complex and comprehensive analysis to determine whether joint employment exists. To that end, the AI focuses on “horizontal” and “vertical” joint employment.