We have a temp employee who we connected with through a staffing agency. The agency is paying the employee, but we keep an employment file on her and supervise all her assignments. Am I a joint employer along with the staffing agency?
Whether an employee is a joint employee of you and another employer, the staffing agency, depends on all the facts. Such determinations are made on a case-by-case basis.
Over the years, there have been different court tests and U.S. Department of Labor tests and lists of factors to consider when making a determination as to when two employers are considered joint employers for wage and hour purposes.
As of March 16, 2020, there is a new test in effect under the Fair Labor Standards Act for determining joint employment. The Department of Labor recently published its Final Rule. https://www.dol.gov/sites/dolgov/files/WHD/publications/flsa-fr-joint-employer.pdf
The Final Rule sets forth a four-factor balancing test. No single factor is determinative, so despite there being a new rule, it remains a case-by-case determination.
Here is the test:
1. Does the other employer hire or fire the employee?
2. Does the other employer supervise or control the employee's work schedule or conditions of employment to a substantial degree?
3. Does the other employer determine the employee's rate and method of payment?
4. Does the other employer maintain the employee's employment records?
The DOL points out that a joint employer must actually exercise one of these factors to be a joint employer. To merely reserve the right to is not sufficient. And, just because an employee is "economically dependent" on the potential joint employer is not a factor. Finally, simply the use of a recognized business model (ex. franchise; operation of a store on one's premises; or contractual agreements as to certain terms) does not determine or eliminate joint employer status under the FSLA.
The best practice is to have your local counsel review the facts of your particular situation to determine if you have joint employer wage and hour risk.
Jack McCalmon and Leslie Zieren are attorneys with more than 50 years combined experience assisting employers in lowering their risk, including answering questions, like the one above, through the McCalmon Group's Best Practices Help Line. The Best Practice Help Line is a service of The McCalmon Group, Inc. Your organization may have access to The Best Practice Help Line or a similar service from another provider at no cost to you or at a discount. For questions about The Best Practice Help Line or what similar services are available to you via this Platform, call 888.712.7667.
If you have a question that you would like Jack McCalmon or Leslie Zieren to consider for this column, please submit it to email@example.com. Please note that The McCalmon Group cannot guarantee that your question will be answered. Answers are based on generally accepted risk management best practices. They are not, and should not be considered, legal advice. If you need an answer immediately or desire legal advice, please call your local legal counsel.