Tag Archives: Horizontal Joint Employment

The Wage Hour Division Issues an Interpretation on Joint Employment Relationships

Joint EmploymentAs part of the Wage Hour Division’s continuing focus on defining the employment relationships covered by the FLSA, the Division’s Administrator has issued an Administrators’ Interpretation (as well as a Fact Sheet) addressing joint employment relationships.  At the very least, the Interpretation suggests that the Division will be seeking to use the “joint employer” doctrine to pursue multiple entities – and “deeper pockets” – to address wage issues.

“Larger and More Established” Employers

The Administrator’s Interpretation notes that joint employment often involves one “larger and more established” employer “with a greater ability to implement policy or systemic changes to ensure compliance.”  In those cases, the Administrator suggests that the Wage Hour Division may hold the larger company responsible for “financial recovery” and “future compliance.”

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U.S. Department of Labor Weighs in on “Joint Employer” Standard

E. Jason Tremblay

E. Jason Tremblay

On January 20, 2016, the Wage and Hour Division of the U.S. Department of Labor (DOL) issued an Administrative Interpretation setting forth guidance for when businesses will be deemed “joint employers” under the Fair Labor Standards Act. A copy of DOL’s Administrative Interpretation No. 2016-1 (the “Interpretation”) is attached here for your reference.

The Interpretation makes abundantly clear to businesses that share employees or use contractors or temporary staffing agencies that they may be deemed “joint employers” and become legally responsible for any wage and hour violations committed by the other joint business. The Interpretation goes on to explain two types of joint employment scenarios – “horizontal” joint employment and “vertical” joint employment. 

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