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Rules changing for employers


They're coming at employers from all sides — a conclusion one can't help but reach in light of the Jan. 20 guidance issued by the U.S. Department of Labor's wage and hour division on the issue of joint employment. As we report on page 3, this represents a warning to employers of more aggressive activity on the part of the Labor Department over the issue of when a business can be considered a joint employer.

The DOL says this guidance will be helpful to employers in complying with the Fair Labor Standards Act, as well as the Migrant and Seasonal Agricultural Worker Protection Act. As the DOL explains, there are two types of joint employer relationships: horizontal, where employees work for associated employers; and vertical, which typically involve a staffing agency, subcontractor, labor provider or other intermediary performer. It follows the National Labor Relations Board's August ruling on Browning-Ferris Industries of California Inc., in which the board held that a company need only have direct control of a owner — and does not even have to exercise that control — to be considered a joint employer.

Even the U.S. Equal Employment Opportunity Commission — though it has assumed a lower profile on the issue — has gotten into the act, successfully arguing in a racial harassment and retaliation lawsuit settled last year that a contractor was in effect a joint employer with a subcontractor.

While attributing a conspiracy on federal agencies' part may be giving too much credit to government efficiency, clearly these agencies are reflecting the Obama administration's concern over whether, to quote the DOL, “employees' rights and employer's obligations” are reflected in employment practices, as businesses vary their organizational and staffing models in response to economic necessity.

All this could change with the election of a new president next year. But in the meantime, many employers may simply acknowledge they are in a joint employment relationship and move on from there.

This is yet another headache for employers, and there is justifiable concern it will lead to further regulatory action against employers — and an enthusiastic plaintiffs' bar.

But, as always, it all comes down to treating workers fairly and being conscientious about seeing they are paid whatever is their due. Once that is addressed, everything else should readily fall into place.