Joint employer issues are all the rage right now. Recently, the National Labor Relations Board (NLRB) put the screws to McDonald’s in finding that the Company is liable “jointly” along with their franchisees for alleged labor violations. So, it’s not shocking to learn that the U.S. Department of Labor recently jumped on the bandwagon, putting in its two cents on joint employers.
Last week, the DOL quietly issued a new Administrator’s Interpretation 2016-1 (AI) on the responsibilities and obligations of joint employers. Although the AI focuses largely on the Fair Labor Standards Act, the DOL issued Fact Sheet #28N, which focuses on joint employer responsibilities under the FMLA. This new AI and FMLA fact sheet were highlighted on the DOL’s own blog!
What precisely is a joint employer, you ask? The DOL sums it up in one sentence: “When a person is employed by two or more employers such that the employers are responsible, both individually and jointly, for compliance with a statute.”
Where a joint employer relationship exists under the FMLA, one employer is considered the primary employer, while the other is the secondary employer. As the DOL points out, “determining whether an employer is a primary or secondary employer depends upon the particular facts of the situation.” The main factors include:
- who has authority to hire and fire, and to place or assign work to the employee;
- who decides how, when, and the amount that the employee is paid; and,
- who provides the employee’s leave or other employment benefits.
Keep in mind: According to the FMLA regulations, where a temporary placement or staffing agency provides employees to another company, the staffing agency is most commonly the primary employer.
In its AI, and as provided in the FMLA regulations, the DOL outlines the FMLA responsibilities for both primary and secondary employers:
Responsibilities of Primary Employers
- Providing required FMLA notices to its employees, and providing FMLA leave
- Maintaining group health insurance benefits during the leave
- Restoring the employee to the same job or an equivalent job upon return from leave, and
- Keeping all records required by the FMLA with respect to primary employees
Responsibilities of Secondary Employers
- Prohibited from interfering with a jointly-employed employee’s exercise of or attempt to exercise his or her FMLA rights, or from firing or discriminating against an employee for opposing a practice that is unlawful under the FMLA
- Restoring the employee to the same or equivalent job upon return from FMLA leave, such as when the secondary employer is a client of a placement agency and continues to use the services of the agency and the agency places the employee with that client employer, and
- Maintaining basic payroll and identifying employee data with respect to any jointly-employed employees
Generally, a yawner of an AI. Come on, you have to agree, yes?
That said, the DOL did include in its AI this handy-dandy chart that at least looks pretty and contains links to other relevant fact sheets. It’s worth a look.
|FMLA Responsibilities of Joint Employers||Primary Employer||Secondary Employer|
|Count jointly-employed employees for coverage and eligibility determinations (Fact Sheet #28)||Yes.||Yes.|
|For employee-eligibility determination, use its worksite for the eligibility test (50 employees within 75-miles of the worksite)(Fact Sheet #28)||Yes, unless the employee has physically worked at the secondary employer’s facility for at least one year.||No, unless the employee has physically worked at the secondary employer’s facility for at least one year.|
|Provide FMLA notices to the jointly-employed employee (Fact Sheet #28D)||Yes.||No; however the secondary employer must provide FMLA notices to its own employees.|
|Provide FMLA leave to the jointly-employed employee (Fact Sheet #28F)||Yes.||No; however the secondary employer must provide FMLA leave to its own eligible employees.|
|Maintain benefits for the jointly-employed employee (Fact Sheet #28A)||Yes.||No; however the secondary employer must maintain benefits for its own employees who take FMLA leave.|
|Restore the jointly-employed employee to work (Fact Sheet #28A)||Yes.||No, unless the secondary employer is continuing to use the placement agency and the agency places the employee with that secondary employer.|
|Not retaliate, discriminate or interfere (Fact Sheet #28A and Fact Sheet #77B)||Yes.||Yes.|
|Keep records||Yes, the primary employer keeps all required records.||Yes, the secondary employer keeps payroll data and identifying employee information.|
Insights for Employers
Any practical insight gleaned from this AI is nicely outlined by my friend, Marti Cardi, in her article on the new AI. In short, Marti encourages us to:
- Analyze your worker arrangements that are not straight-up employer-employee relationships
- Inquire about the FMLA practices/procedures of any staffing or labor agency you use to ensure it is fulfilling its FMLA obligations
- Coordinate FMLA compliance with any other employer with which you share workers. Do it now so that you’re not deciding as on the fly
- Joint employer obligations extend beyond FMLA obligations – don’t forget compliance with the wage and hour rules established by the Fair Labor Standards Act and its state law counterpart