Labor Dept.’s ‘Joint Employer’ Guidance Puts Employers At Risk

Employers could be at greater risk for minimum wage and overtime violations under new “joint employer” guidance released by the Labor Department. The guidance, a “road map” for determining when an employer is responsible for paying back pay and penalties, could expand liabilities for companies using subcontractors or staffing firms. The concept of “vertical joint employment” means a company who hires a subcontractor could be considered a joint employer, though the company does not supervise, set worker schedules for, or make hiring or firing decisions regarding the subcontractor’s employees. The guidance “serve[s] as a reminder to businesses that they need to think carefully about whether they may be viewed as joint employers over workers they do not consider to be their employees, even workers over whom they have little control,” employment law firm Ogletree, Deakins, Nash, Smoak & Stewart PC wrote on their site.