The 2020 rule included standards for « vertical » joint employment, where an employee only works for one employer but depends on another business entity for their work, and for « horizontal » joint employment, where an employee is employed by more than one particular employer. If a company is considered a vertical or horizontal joint employer, it is jointly and severally liable (with any other joint employer of the workers in question) for compliance with the provisions of the RSA regarding wages and working time. A typical example of co-employment work occurs when companies use temporary employment agencies to hire their employees. A company signs a contract with a temporary employment agency to hire employees to perform work for the benefit of the company. The temporary employment agency is the registered employer. (i) Example. A person works 30 hours a week as a chef in a restaurant and 15 hours a week as a chef in another restaurant owned by the same person. Each week, the restaurants coordinate and set the chef`s schedule at each location, and the chef works interchangeably in both restaurants. The restaurants jointly decided to pay the chef the same hourly rate. Are they co-employers of the Chief? WASHINGTON, DC – The U.S. Department of Labor today announced a final rule to repeal an earlier rule titled « Joint Employer Status under the Fair Labor Standards Act, » which came into effect in March 2020. By repealing this rule, the ministry will ensure that more workers have protection against minimum wage and overtime under the Fair Labour Standards Act.
The final rule is likely to extend co-employer status to corporate relationships involving employees of affiliated and franchised businesses that were not previously considered joint employers, which could result in liability under the RSA. In light of the final rule, employers should consult with counsel to understand their obligations and exposure as joint employers with respect to their obligations under the RSA. If [the recruitment agency] and the company are the joint employers of the employee, the employee can sue both [the personnel agency] and the company for salary arrears. In other words, both [the recruitment agency] and the company are responsible for the harm caused to the employee. But if [the recruitment agency] and the company are separate employers, the employee can only sue the [recruitment agency]. Note that the employee`s salaries are the same in both scenarios. Co-employment apprenticeship is only for those from whom the employee can claim damages. Imagine, for example, that [the recruitment agency] goes bankrupt. If the company is his co-employer, the employee can still recover. The new rule is likely to reflect the test of economic reality used in previous governments. The Wages and Hours Division of the DOL has already noted that « the concept of shared employment, like employment in general, should be defined extensively ». Under the economic realities test, the question ultimately arises as to whether the employee is economically dependent on the alleged joint employer – not whether the employer exercises control.
The following factors were generally taken into account: (i) Example. An office park company hires a concierge company to clean the office building after work. Under a contractual agreement between the office park and the security company, the office park undertakes to pay the guarding company a fixed fee for these services and reserves the right to supervise the guards in the performance of these cleaning services. However, office park staff do not set salary rates or individual schedules for guards and do not supervise the performance of their work by employees. Is the office park a joint employer of the guards? The four-factor test in the March 2020 rule was very similar to the joint job test passed by the Ninth District of Bonnette in California against the Health & Welfare Agency. [19] While the bonnette test takes into account whether an employer has reserved a contractual right to act with respect to an employee`s terms and conditions of employment, the March 2020 rule narrowed the bonnette test by requiring « some effective exercise of control »[20] and was therefore more favourable to alleged joint employers than the bonnette test. The final rule does not deal with joint employment under federal laws other than the RSA, such as the National Labour Relations Act (« NLRA ») or similar state laws. [30] On the 29th. In July, the Federal Ministry of Labour (DOL) issued a final regulation entitled « Abolition of joint employer status under the Fair Labour Standards Act ». This final rule, which went into effect on Oct. 5, formalized the DOL`s proposal to repeal the Trump administration`s common employer rule (Trump-era rule), which went into effect on March 16, 2020, and all related regulations. (ii) Request.
According to these facts, the packaging company is not a joint employer of the employees of the personnel agency, since the personnel agency exclusively determines the remuneration and working hours of each employee. Although the packaging undertaking exercises some control over the workers by exercising limited control over their work, such supervision, in particular in view of the supervision of the personnel agency, is not in itself sufficient to establish that the packaging undertaking is a common employer without additional data being available for such a conclusion. .