Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in Law360 Employment Authority, in “Decisions Loom in Long-Simmering Joint Employer Debate,” by Daniela Porat. (Read the full version – subscription required.)
Following is an excerpt:
The debate over what defines a joint employer has been stuck in limbo, but attorneys say it hinges on how a company exercises control over its workers and on what it means to be an employee under the FLSA. An answer poised to come this summer bears significant consequences regarding who is held liable for wage violations.
The U.S. Department of Labor filed another brief Friday in its Second Circuit appeal of a lower court ruling that largely vacated a Trump-era joint employer rule, saying it expects to issue a final rule by late summer. It was another moment of whiplash in the ongoing debate over what constitutes joint liability.
Critics say the Trump-era definition of joint employment is too narrow and allows employers to shirk their responsibilities under the Fair Labor Standards Act. Where the DOL's rulemaking and Second Circuit decision land will have major implications on wage and hour litigation, attorneys said. …
Here, Law360 looks at the state of the joint employer debate.
Degree of Control …
The standard set out in the 2020 joint employer rule reflects the proper interpretation of joint employment for Paul DeCamp, a former administrator of the DOL's Wage and Hour Division and current co-chair of Epstein Becker Green's wage and hour practice group.
"It's a hotly contested issue, but from my perspective, focusing on direct, actual exercised control, rather than hypothetical, or reserved, or potential control is a better indicator of who is or is not a joint employer," he said. …
Spirit of the FLSA …
DeCamp said the criticism that the focus on direct control is inconsistent with economic realities is incorrect.
"If anything, looking at who is actually setting the terms and conditions of employment is the essence of economic reality. It's economic fantasy to be asking about what rights people might have exercised under a different set of facts," he said.
"Instead, by focusing on which party actually sets the essential terms and conditions of employment, that goes to the core of economic reality."
In Limbo a Little Longer
All eyes are on the Second Circuit as it reviews a lower court decision that largely vacated the 2020 joint employer rule, an appeal that the current DOL unsuccessfully sought to pause earlier this year. …
Ultimately, DeCamp said he thinks a standard focused on direct control is more indicative about how the parties in a relationship actually function as opposed to how they might function, and the rule on appeal is the appropriate one.
"The direct, actual immediate control standard also leads to more predictable outcomes," he said. "I think it's better for everybody involved — workers, businesses and agencies — to know in advance whether an entity is or is not going to be deemed an employer or joint employer of a particular group of workers."
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