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Are You a Joint Employer?

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By Ephrat Livni, Esq. on March 01, 2016 2:59 PM

You don't want full responsibility for your workers and so your business avails itself of one of the many schemes that exist to employ people without being their employer. This saves you money and headaches and it seems to be working out great. You don't pay for insurance or sick days, just labor.

The US Department of Labor (DOL), however, now understands that this is what American businesses are increasingly doing and is trying to ensure that workers don't end up laboring without any of the protections of employment. In January the agency issued guidance to employers to help them determine whether they are joint employers, and it's important to know this to ensure that you and your business stay within the law and do right by your workers.

Tricky Stuff

The DOL writes, "More and more, businesses are varying organizational and staffing models by, for instance, sharing employees or using third-party management companies, independent contractors, staffing agencies, or labor providers. As a result, the traditional employment relationship of one employer employing one employee is less prevalent."

The DOL wants to ensure that employees are protected and that they do not -- as a result of having multiple employers -- end up with none of the benefits traditionally associated with employment. But the issue it faces and the one you will too is that proper characterization of a work relationship that is deliberately not direct, is difficult.

Not every multiple employment relationship is a joint employment one, and there are both vertical and horizontal joint employment situations. The Fair Labor Standards Act (FLSA) views employment expansively and the DOL writes that an employer is anyone who "suffers or permits work" on their behalf. But the reality is that there are so many types of labor arrangements at this point that it is impossible to generalize about what any business should do.

Figuring It Out

To ensure that your business stays within labor law and does not deprive workers of their due, speak to an attorney. A lawyer can review your employment arrangements and help guide you if you need to make changes. Get help.

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