How many employees do you have? Less than 10 or perhaps a few dozen? Maybe even more than 100 if you operate a large firm or multiple locations? While this question may seem straightforward, the answer can actually be quite complicated when you begin to consider joint employer status as a possibility. This is a condition where an individual works for one company but performs services or reports to another company; in that case, both organizations would be considered the individual’s joint employers, which has important legal implications.
For example, imagine an office that hires an outside contractor to provide janitorial services. The janitor may not be an actual employee of the office, but since he provides a service to the office and reports to its personnel, the contractor and the office function as his joint employers.
The existing rules for designation as a joint employer stem from a 2015 decision by the National Labor Relations Board (NLRB) in Browning-Ferris Industries of California. In the case, the NLRB ruled that multiple organizations or entities can be deemed joint employers if they either have the contractual authority to control the manner and means in which employees perform their job tasks or the right to exercise control over employees’ work and conditions of employment.
Critically, the NLRB’s rulings establish that as long as an employer has the ability or right to exercise control over workers—even if they do not exercise those rights or abilities—then they may still be considered a joint employer.
There are serious obligations that come with joint employer status. Once classified as a joint employer, then organizations assume liability for the relevant workers’ conditions, treatment, benefits, and wages. Now, if the janitor from the above example faces discrimination, sexual harassment, denied benefits or overtime pay, or a range of other issues—regardless of whether or not the joint employer knew about them—the joint employer may be as liable for damages as the janitor’s direct employer.
With all of theses stipulations in play, how can employers and organizations prevent themselves being labeled as joint employers? The first step is to avoid certain interactions with workers: Do not, for example, ask a contractor to fire a specific worker, do not offer workers instruction or training, and so on. Additionally, review contracts and revise them to explicitly state that there is no joint employer relationship and point out the duties of each party—your organization and the contractor—relative to the worker.
If you have any questions or would like additional guidance, contact Koppekin Consulting by calling 1-(818) 344-9076 or sending a message to Stephen@KoppekinConsulting.com.