The Labor Department issued its interpretation of joint employment that is conducive to government enforcement.
David Weil, the director of the DOL Wage and Hour Division explained that subcontractors, outsourcers and staffing agencies should be held responsible for labor violations. The department issued its detailed guidance to send a message to employers that they will be held liable in the future. You can read Weil’s blog post that accompanied the issuing of the interpretation here.
There are two types of joint employer relationships are discussed in the interpretation. Horizontal joint employment involves an employee working for 2+ employers that are separate only technically. Vertical joint employment occurs when one employer uses an intermediary to employ workers (think of a staffing agency). Vertical joint employment is more common and can lead to “significant violations” of labor standards.
The new departmental guidelines will held determine if McDonald’s is a joint employer and responsible for alleged labor violations at franchised stores.
You can review the Labor Department’s full interpretation here. This new guide builds onto the statement the DOL issued last summer which clarified which workers are employees and which are contract workers.
Courts are free to disregard this interpretation, but attorneys may find it helpful in litigation to present the document as the way the wage and hour division sees this topic.
Learn how economic damages are calculated in wage and hour suits from the economic and statistical experts at EmployStats,