Department of Labor Issues Joint Employer Guidelines

On January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued an Administrator’s Interpretation (AI) on joint employment under the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The Department uses these Administrator's Interpretations, rather than more narrow opinion letters. The AI distinguishes between two types of joint employment:

Horizontal joint employment exists where the employee has employment relationships with two or more employers and the employers are sufficiently associated or related with respect to the employee such that they jointly employ the employee. The analysis focuses on the relationship of the employers to each other. This AI explains that guidance provided in the FLSA joint employment regulation – which focuses on the relationship between potential joint employers – is useful when analyzing potential horizontal joint employment cases.  

Vertical joint employment exists where the employee has an employment relationship with one employer (typically a staffing agency, subcontractor, labor provider, or other intermediary employer) and the economic realities show that he or she is economically dependent on, and thus employed by, another entity involved in the work. This other employer, who typically contracts with the intermediary employer to receive the benefit of the employee’s labor, would be the potential joint employer. Where there is potential vertical joint employment, the analysis focuses on the economic realities of the working relationship between the employee and the potential joint employer. This AI explains that guidance provided in the MSPA joint employment regulation is useful when analyzing potential vertical joint employment. The structure and nature of the relationship(s) at issue in the case, reflecting potentially horizontal or vertical joint employment or both, should determine how each case is analyzed.

The AI and other WHD materials on joint employment are available here.

Interesting timing here. Dr. David Weil, Administrator of the WHD, is speaking on February 23 at the Los Angeles County Bar Association's Ben Aaron Lecture. His topic is "Mending the Fissured Workplace," and I am sure he will address joint employment, independent contractor status, and other important issues. More information on the program is available here.