Department Of Labor Issues 'Joint Employer' Guidance

February 22, 2016

The U.S. Department of Labor issued an Administrator’s Interpretation to help business owners better understand the concept of joint employment under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.
In July 2015, the National Labor Relations Board significantly expanded risk for companies that subcontract employees to be considered a “joint employer” of its contractors, as Paul Gary, principal The Gary Law Group, noted in The Talk in October 2015. The risk involves liability for injuries, taxes, contract breaches and other third-party claims. This can affect residential construction constituents who market “installed sales” to the extent that any of the installation is subcontracted, Gary explains.
DOL says the new guidance is necessary because, as a result of continual changes in the structure of workplaces, the possibility that a worker is jointly employed by two or more employers has become more common in recent years. The construction industry was specifically cited as an example of this scenario.
The AI identified seven factors as probative of the core question of whether the employee is economically dependent on the potential joint employer who, via an arrangement with the intermediary employer, is benefitting from the work. The factors, as reported by the National Association of Home Builders, are:

  • Directing, controlling, or supervising the work performed,
  • Controlling employment conditions,
  • Permanency and duration of relationship,
  • Repetitive and rote nature of work,
  • Integral to business,
  • Work performed on premises, and
  • Performing administrative functions commonly performed by employers.