Joint Employer Liability Changes – How Big of an Issue is it for Employers?
Joint employer liability changes – how big of an issue is it for employers?
Will 2016 be the year in which joint employer liability will be a major issue for employers? It is safe to assume the answer is yes. In September of 2015, The National Labor Relations Board (NLRB) focused their attention on the joint employer liability issue with the expectation of expanding the concept definition, which would lead to a higher number of employers that can be found jointly liable. In a long-awaited ruling regarding the case involving waste management firm Brown-Ferris Industries, the NLRB upheld a controversial shift towards redefining the joint-employer status between franchisor and franchisee. More recently, the Department of Labor issued an Administrative Interpretation on their website to share a viewpoint on how they would potentially analyze whether there is joint employer liability between two or more different entities that share workers. The full Administrative Interpretation can be found here.
The DOL plans to use the new interpretation to increase aggressive joint employment enforcement against the growing number of businesses in today’s new economy that rely on contract service providers to perform functions integral to their own business. Courts are not bound to follow an Administrator’s Interpretation and it is too early to tell if the DOL’s latest guidance, AI 2016-1, will change judicial enforcement. But it will encourage plaintiffs’ lawyers and their clients to bring joint employer claims under the federal wage law. Consequently, businesses across all industries should examine the risk of any workforce practices as it pertains to the new analytical framework that the DOL will leverage when considering alternative ways to get work done with lower joint employer risks.
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