The U.S. Department of Labor has proposed a new rule to clarify when two or more employers can be held jointly responsible for a worker’s wages and rights under three federal laws. To achieve that, the U.S. Department of Labor’s Wage and Hour Division announced a proposed rule to address joint employer status under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
The proposal aims to set a uniform national standard, taking into account existing court rulings on joint employer cases and in a way, resolving the conflicting decisions across different courts.
In doing so, the department would ensure employees and employers have a clear, consistent understanding of when multiple employers are jointly responsible for protecting the wages and other rights of an employee.
Joint Employment
The term joint employment means a condition in which a single individual stands in the relation of an employee to two or more persons at the same time.
An employee may have multiple employers. In most cases, each employment will be distinct from the others, and each employer will be responsible on its own for complying with the law with respect to the employee. In some cases, however, two or more employers may employ the employee in a manner that makes them joint employers of the employee, such that they are together responsible for complying with the law with respect to the employee.
Joint employment generally arises in two contexts, commonly described as “vertical” or “horizontal.” In “vertical” joint employment, an employee is jointly employed by two or more employers that simultaneously benefit from the employee’s work. By contrast, in “horizontal” joint employment, an employee works separate hours for two (or more) employers in the same workweek, and the employers are sufficiently associated with each other such that they are joint employers.
When a joint employment relationship exists, those employers are jointly and severally liable for any wages, damages, and other relief owed to employees, including paying for all hours the employee worked for all joint employers, and all overtime premiums due for that time.
Under the FLSA, joint employers are jointly and severally liable for any wages, damages, and penalties owed to the employees, and an employee’s total hours worked each week for all joint employers is used to determine the employee’s entitlement to overtime pay.
Similarly, under MSPA, each joint employer must ensure that the employee receives all applicable employment-related rights granted by MSPA, such as accurate and timely disclosure of the terms and conditions of employment, written payroll records, and payment of wages when due.
By restoring regulatory guidance for determining joint employer status under the FLSA and aligning the FLSA analysis with the analysis under the FMLA and MSPA, the department believes the proposal would promote better business practices, provide certainty, reduce litigation, and enhance uniformity in the way courts and the Wage and Hour Division apply three laws that share the same statutory scope of employment.
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