DOL Standards for Joint Employment

Blog

On Jan. 20, 2016, the DOL issued guidance on joint employment and liability under the Fair Labor Standards Act (FLSA) with Administrator’s Interpretation No. 2016-1.
In a joint employment relationship, one employee is considered to be working for more than one employer at the same time. Under the FLSA, joint employers are “jointly and severally liable” for wage violations. This means that an employer that is part of a joint employment relationship can be held liable for the wage violations of a secondary or intermediary employer.
In its Administrator’s Interpretation (AI), the DOL examines “horizontal joint employment” and “vertical joint employment” relationships as situations where joint employment is likely to exist, as well as the standards for making this determination.
Horizontal joint employment exists when 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 DOL provides the example of a waitress who works for two separate restaurants that are operated by the same entity. Here, the question is whether the two restaurants are sufficiently associated with respect to the waitress, such that they jointly employ the waitress.
Vertical joint employment exists when the employee has an employment relationship with one employer (typically a staffing agency, subcontractor or other intermediary employer) and the economic realities show that the employee is economically dependent on, and therefore 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.
The AI outlines separate factors to be considered when determining whether a potential horizontal or vertical joint employment relationship exists. These factors are not entirely consistent with the way the courts have historically made joint employment determinations.
Employers should review the AI and determine if any potential joint employment relationships exist. Where a joint employment relationship exists, consider conducting due diligence to ensure employers in the relationship are in compliance with wage and hour requirements under the FLSA.

We do more than cover small businesses and individuals with the right insurance policies and benefit plans – what motivates our team is helping you save more so you can invest more in your team, family, and goals.

Recent Articles

AUI Gives Back – Act #16 April Dress Down Days for Friends of Stark Pound

In April, 2024 the teams of AUI and ClarityHR raised money for one of our favorite charities Friends of Stark Pound.  Several members of our team have adopted their pets through this amazing organization.  Julie and Danielle are fur-ever homes for two former Stark Pound rescue dogs. With our combined efforts, AUI and ClarityHR were […]

AUI Gives Back – Act #14 AUI Sponsors the Heart to Heart Breakfast

On May 7th, 2024 Heart to Heart Leadership held their 31st annual breakfast. AUI was proud to be a nickel sponsor and honored to take part in the breakfast.  We were welcomed by purposeful leaders from all over Northeast, Ohio at the John S. Knight Center.  We were proud to invite our friends from Choices […]

Sign Up for Our Newsletter!

Never miss an update from AUI – sign up for our newsletter today for the latest from our team and industry!

This field is for validation purposes and should be left unchanged.

Request a
Personalized Quote

Tell us a little about your insurance needs, then we will contact you for a quick conversation about what you do, what you love, and how we can help!