January 22, 2016
This week, DOL Wage and Hour Division Administrator David Weil continued his attack on the "fissured workplace" by issuing an Administrator's Interpretation (AI) on the joint employer rule, making clear his own expansive view of when violations of wage and hour laws can be attributed to two or more employers. Much like the AI issued this summer on misclassification of independent contractors, the joint employer AI takes the most liberal view of existing law under the Fair Labor Standards Act to determine whether a joint employment relationship exists in situations such as franchising, use of staffing agencies, subcontracted work, etc. Weil states: "In sum, the expansive definition of 'employ' as including 'to suffer or permit to work' rejected the common law control standard and ensures that the scope of employment relationships and joint employment under the FLSA . . . is as broad as possible." The AI offers examples of what constitutes a joint employment relationship and what does not, but given that each inquiry is fact intensive, it is hard to draw anything concrete from these examples. Notably, examples regarding franchise relationships are missing, even though these are a likely enforcement target. How much deference the courts will give the new guidance remains to be seen given that it was posted without going through the formal rulemaking process. Employers should carefully examine their relationships with other companies with whom they do business, keeping in mind that the issuance of both AIs underscores the enforcement priorities of this administration and its hostility towards the so-called "fissured" workplace.