HR Administration

Legal Briefing: Labor Department Examines Multiple Choice

By Mark Kobata

Mar. 31, 2016

The U.S. Labor Department released an Administrator’s Interpretation on joint employment under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, or MSPA, calling for greater scrutiny of arrangements in which multiple companies might jointly employ workers. The guidance is on identifying scenarios in which two or more employers jointly employ an employee and are thus jointly liable for compliance under the FLSA and MSPA. It states that the scope of employment relationships and joint employment under the acts should be interpreted as broadly as possible. The Labor Department identifies two types of joint employment arrangements that should be analyzed: The first is horizontal joint employment in which an employee is employed by two or more technically separate but related or overlapping employers. The second is vertical joint employment in which an employer has contracted or arranged with an intermediary to provide it with labor and/or perform for it some employer functions. Administrator’s Interpretation No. 2016-1 (Jan. 20, 2016).

Impact: Employers using business models or labor arrangements that could result in joint employment should be cautious since the Labor Department is closely monitoring various potential joint-employment scenarios to achieve statutory coverage, financial recovery and future compliance.

Mark T. Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago. To comment, email editors@workforce.com.

Mark Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago.

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

HR Administration

Policy management: What is it and what does it look like for HR?

Summary Policy management involves the creation and maintenance of administrative procedures and guidel...

hr policy, policy automation, policy management

workforce blog

Compliance

Minimum Wage by State in 2022 – All You Need to Know

Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

HR Administration

Rest and lunch break laws in every US state

Summary Federal law does not require meal or rest breaks Some states have laws requiring meal and rest ...