U.S. Department of Labor Provides Guidance on Joint Employment Under the Fair Labor Standards Act

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On January 20, 2016, the Department of Labor (DOL) issued an Administrator’s Interpretation clarifying the scope of joint employment for purposes of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The Interpretation reiterates the principle that when one joint employer fails to comply with the FLSA or MSPA, all of the joint employers can be held liable. 

The importance of determining joint employer status is essential in understanding an employer’s obligations under the FLSA and MSPA. For example, if during the same week, an employee works 15 hours for one joint employer and 30 hours for another joint employer, the employee is deemed to have worked 45 hours and must be compensated for overtime pay accordingly. If the employee is improperly compensated, each joint employer is “jointly and severally” liable to the employee for the penalties under the FLSA or MSPA. This means that the employers determined to be “joint employers” with each other will be held liable even if only one of them wrongfully fails to pay overtime compensation.

The Interpretation was published approximately five months after the National Labor Relation Board’s Browning-Ferris decision, which modified the traditional landscape of what constitutes a joint employer. 

Employers should take this opportunity to evaluate and audit their pay practices, including examining potential joint employer status, in order to fully comply with their legal obligations under the FLSA and MSPA. 

For assistance in conforming to the guidance offered in the DOL’s recent Interpretation, please contact Connell Foley’s labor and employment law attorneys.