| Are You a Joint Employer?
Recently, the National labor Relations Board (NLRB) handed down
a ruling which stated that companies can be held responsible and
liable for labor violations which were committed by their independent
contractors, temporary agencies or franchisees. This so called “joint
employer” decision could have broad repercussions for the
business world.
This ruling is a sharp departure from previous decisions which
stated that companies were only responsible for employees who were
under their direct control. Without the power to set hours, wages
or other job related responsibilities, the earlier rulings held
that companies could not be held responsible for the labor practices
of their independent contractors or franchisees. The NLRB
is now asserting that as joint employers, both companies share
or co-determine those matters which govern the essential terms
and conditions of employment.
Opponents of the ruling warn that it could have a very negative
impact on businesses such as restaurants, retailers, manufacturers,
and construction firms as well as hotels, cleaning services and
staffing agencies.
Also, in a related opinion, the U.S. Fourth Circuit Court of Appeals
recognized the “joint employer doctrine” for determining
liability in Title VII employment discrimination lawsuits. This
means that multiple organizations may be considered employers at
the same time for the purposes of hearing and ruling on discrimination
lawsuits. The court has developed a “hybrid test” to
determine if an organization is a joint employer for the purposes
of liability in employment discrimination cases.
In its decision the court stated a new set of factors which courts
must consider in determining whether a company can be considered
as a joint employer and therefore liable for employment discrimination.
Those factors include the following:
- Authority to hire and fire the individual;
- Day to day supervision of the individual,
including the disciplinary process;
- Whether or not the supposed employer
furnishes equipment used and place of work;
- Possession of and responsibility over
the individual’s employment records;
- The length of time during which the
individual has worked for the supposed employer;
- Whether or not the supposed employer
provides the individual with formal or informal training;
- Whether the duties of the employee
are akin to the regular duties of other employees;
- Whether or not the employee is assigned
only to one supposed employer;
- 9Whether the individual and supposed
employer intended to enter into an employment relationship.
In order to protect themselves and their organizations, employers
should be aware of and in compliance with these and other regulations/decisions
issued by various federal agencies and courts. If Paul Hilton,
Human Resources Consulting, LLC can be of any assistance with these
or other HR related issues, please do not hesitate to contact us.
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