Are You A “Joint Employer”?
Posted on 22-Dec-07 by The Timekeeper
Two articles recently came to my attention, one from Ohio and one from California,
related to the issue of “joint employers” and their responsibilities under wage and hour law.
So whatheheck is a “joint employer” anyway?
It’s possible under the law for an employee to have more than one employer at the same time (and I’m not talking about moonlighting — this is for doing the same job). The situation comes up when a company contracts with a personnel or temp agency for the agency to supply workers for the company. The workers are under the direct supervision of the company, which controls when the people start and stop work and what they do while they’re on the job. They are basically indistinguishable from other employees of the company.
When that happens, the agency and the company are considered “joint employers” of those workers.
So why should I care?
Well, if you’re in that kind of situation (or you think there’s a possibility you might be), you need to be sure you know what the other employer is up to — because you can be held liable along with them for any wage and hour violations they commit.
So, for instance, if you hire workers from a temp agency, and the temp agency doesn’t pay those workers proper overtime, you could find yourself facing a DOL wage and hour lawsuit.
Which is exactly what has happened to several hotels in Ohio. And could affect restaurants in California. The issue of joint employment has even impacted companies as large as Wal*Mart.
In fact, in Ohio, the U.S. DOL found only 28% of the hotels in the state were in full compliance with federal wage laws. (Which has inspired the Feds to look more closely at Ohio hotels. If you’re in the hospitality industry in Ohio, you have been warned.) Most of the violations were related to the housekeeping staff, which many hotels outsource to a personnel agencies. In fact, according to DOL spokesman Brad Mitchell, the agency was prompted in its enforcement drive in Ohio in the first place after learning that many employers in the hospitality industry use temporary employment agencies to get workers.
And your point is?
The point is this: you can’t count on the fact you’ve “outsourced” your employees to a temp agency or a personnel/staffing firm to protect you from wage and hour issues. You need to look closely at the practices of the company you contract with: not just how much you have to pay them, but how (and when, and how much) they pay their workers. Because if they do wrong, you could find yourself in trouble — whether you’re a hotel in Ohio, a mom-and-pop restaurant in California or the world’s largest retailer.
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