How To Know If You're a Joint Employer

Employment, and employee-employer relationships, is an ever-changing concept. America’s evolved from no labor laws to multiple layers of safeguards. For example, the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA) aim to protect all employees, whether they’re full-time, seasonal, freelance, or jointly employed.

Joint employment specifically occurs when a person is employed by multiple employers who are all equally responsible to treat that person with compliance. This means all employers must pay their employee on time, adhere to the correct payroll taxes, not discriminate against their employee, issue W-2s, and other common employer practices.

The FLSA and MSPA share a broad definition of employment to stretch protection as far as possible. Under both, employment means 'to suffer or permit to work.' The phenomenon of joint employment continues to grow with the increase of intermediaries, such as recruitment agencies. Typically, it can be determined by considering different situations. Joint employment falls into two options: vertical and horizontal.

Vertical

If a window washer hired by a car dealership comes from a staffing company, that dealership may become a joint employer if some of the following scenarios occur:

• The dealership handles payroll or other like employer functions
• The dealership sets the employee’s schedule
• The dealership is involved in hiring the employee
• The window washer performs his or her duties on the dealership’s property
• The window washing is vital to the dealership
• The relationship between the cleaner and the dealership is ongoing

Horizontal 

If a waitress works for two different restaurants that function as two separate companies, but share operations, she may be jointly employed by both if the following occur in both restaurants:

• There are common managers
• There are common employees
• There are shared scheduling duties
• Both restaurants perform various payroll duties

Interpretations can vary, meaning it’s best to stay up to date with the Department of Labor’s stipulations on employment and joint employment. Those who are found to not be in compliance with certain rules and regulations will be fined, and generally ordered to pay back wages to wronged employees. Keep up to date here.