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Feds try to clarify joint employer status


The Department of Labor's wage and hour division and the National Labor Relations Board have weighed in on the issue of joint employment and employers' potential liability under federal law.

The Labor Department's Jan. 20 guidance, “Joint Employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act,” says that joint employment can be either “horizontal” or “vertical.”

Horizontal employment “should be considered when an employee is employed by two (or more) technically separate but related or overlapping employers,” such as separate restaurants that share economic ties, says the guidance.

Vertical joint employment situations happen when the “employee of the intermediary employer is also employed by another employer,” which would include staffing agencies, for instance.

Determining whether an employee has more than one employer is important in determining employer rights and obligations under the Fair Labor Standards Act and the agricultural worker act, says the guidance.

Meanwhile, the National Labor Relations Board last year held in Browning-Ferris of California Inc. that a company need have only indirect control of a worker and does not need to exercise that control to be considered a joint employer.

The Equal Employment Opportunity Commission has also made rulings on the issue.

For instance, in EEOC v. Skanska USA Building Inc., which later was settled in January 2015 for $95,000, the agency successfully argued before the 6th U.S. Circuit Court of Appeals in Cincinnati that the joint employer concept could be applied to New York-based Skanska in a case involving a subcontractor.

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