Benefits Insights, Spring 2016
The U.S. Department of Labors Wage and Hour Division (WHD) issued an Administrators Interpretation concerning joint employment under the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The guidance describes how it is possible for a worker to be jointly employed by two or more employers who are both simultaneously responsible for compliance.
The interpretation offers several common scenarios that reflect joint employment and thus trigger joint liability. Once it is determined that a joint employment relationship exists, both employers are then equally responsible for compliance with the FLSA and the MSPA.
Regarding the FLSA, which may impact Service Contract Act covered contracts as well, employers must ensure that the employee receives payment of at least the federal minimum wage for all combined hours worked and overtime pay at not less than 1= times the regular rate of pay for hours worked over 40 in a workweek.
The press release accompanying the interpretation discussed how employers should take more responsibility for their contracted workforce. The WHD noted that more companies than ever are concentrating on core competencies and subcontracting out other types of work. With that, the WHD is seeing problems across all industries, necessitating an increase in enforcement.
The WHD Joint Employment Interpretation may be found at: www.dol.gov/whd/flsa/Joint_Employment_AI.htm.