U.S. Department of Labor Releases Administrator’s Interpretation on Joint Employment under FLSA and MSPA

By XobeeAdmin on January 22, 2016 in Legal Update

On January 20, 2016, the U.S. Department of Labor—Wage and Hour Division released an Administrator’s Interpretation (AI) on joint employment under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The AI provides guidance on situations where employers are jointly liable for compliance under the FLSA and MSPA for jointly employing an employee.

Whether an employee has more than one employer is important in determining employees’ rights and employers’ obligations under the FLSA and MSPA. When two or more employers jointly employ an employee, the employee’s hours worked during the workweek are aggregated and are considered one employment. This could affect the accrual and payment of overtime and/or California paid sick leave to employees. The AI also discusses the broad scope of the employment relationship under the FLSA and MSPA, the concepts of horizontal and vertical joint employment, and other relevant joint employment regulations.

The Administrator’s Interpretation Letter on “Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act” can be found on the United States Department of Labor website: https://www.dol.gov/whd/opinion/adminIntrprtnFLSA.htm.

California already has a law makes certain employers responsible for the workers’ compensation coverage and wage payments of the temporary workers they utilize from a labor contractor. You can read more about this California law here: https://goo.gl/QWmVOe.

Employers who use contract labor, share employees, or lease employees should review the above documents, and ensure that all potential “joint employers” comply with wage and hour laws. If the other employer in the joint employer relationship is not compliant, all employers in the joint employment relationship will be exposed to liability. Finally, employers should also review their contracts with labor contractors to identify and understand any indemnity provisions pertaining to wage and hour violations.