January 25, 2016
Authored by: Christy Phanthavong and Chris Rylands
On January 20, 2016, the federal Department of Labor (“DOL”) issued guidelines to employers on the subject of “joint employment.” Most of the buzz regarding the DOL’s publications centers around the new “Administrator’s Interpretation” of joint employment under the Fair Labor Standards Act (“FLSA”) and the resulting implications for joint liability under federal wage-and-hour laws.
Joint employment exists when an employee is employed by two or more employers, such that both employers have responsibilities under the FMLA. Fact Sheet #28N does not provide a detailed discussion of when joint employment will be found to exist for FMLA purposes, noting instead that the analysis is the same under the FMLA as under the FLSA. Importantly, however, Fact Sheet #28N provides a “staffing company” example, thereby reminding employers that joint employment will often be found to exist when a staffing company places employees at client sites.
In a joint employment situation under the FMLA, it is necessary to identify which employer is the “primary” employer and which employer is the “secondary” employer. Fact Sheet #28N discusses the factors that will be considered in this analysis, including:
- who has authority to hire and fire, and to place or assign work the employee;
- who decides how, when and the amount that the employee is paid; and
- who provides the employee’s leave or other employment benefits.
Importantly, both the primary and secondary employer must count the jointly-employed employee in determining employer coverage and employee eligibility under the FMLA. In addition, both employers have obligations to avoid FMLA interference and discrimination, and to comply with certain record-keeping requirements.
Otherwise, however, the responsibilities of the employers are different. The primary employer is responsible for giving required notices, providing FMLA leave, maintaining group health insurance benefits, and restoring the employee to his or her job following leave.
While the secondary employer generally does not have those responsibilities, the secondary employer is responsible for job restoration in certain circumstances, such as “when the secondary employer is a client of a placement agency and continues to use the services of the agency and the agency places the employee with that client employer.”
Fact Sheet #28N includes a comparison chart to help employers identify their FMLA responsibilities in a joint employment situation.
A final important point, albeit one that is not discussed in Fact Sheet #28N: It is not uncommon for companies to directly hire individuals who were previously assigned to them through a staffing agency. Assuming a joint employment relationship existed during the staffing agency assignment, the company which is now the individual’s direct employer may be obligated to count the individual’s period of service (months and hours) through the staffing agency when determining the individual’s FMLA eligibility.