Article prepared by and republished courtesy of our employment colleagues, including the Chair of DLA Piper’s US Employment Group, Michael J. Sheehan; originally published here: https://www.dlapiper.com/en/us/insights/publications/2014/12/are-you-a-joint-employer/
Think supply chain. Think franchisor. Think private equity. For all these types of businesses, the rules of the game are changing.
For a host of reasons – among them cost, efficiency, liability and risk management – many large companies have separated from the work force that performs the tasks associated with the end-delivery of their products or services. Before, under established rules defining who is the employer for purposes of application of labor and employment laws, such companies could safely shield themselves from employer obligations. That is not so today. Today, this model is under attack.
How did this change?
The National Labor Relations Board, the US Department of Labor, the Equal Employment Opportunity Commission, various other federal and state agencies and, of course, a robust and invigorated plaintiff’s class action bar are advocating a liberalized definition of “joint employer.” The thinking behind this shift can be captured in this question raised by Professor David Weil, now the Administrator of the US Department of Labor, Wage and Hour Division:
Are there ways to allow the beneficial aspects of business models built on adherence to quality and consumer service standards to also assure that they meet their obligations under the law to employees?
It is a loaded question and one that, today, points the barrel squarely at many companies.
DLA Piper has been covering developments in the joint employer story all year. Here are some of the related top posts and alerts.
- The three key federal government prosecutors of labor, employment and wage-hour violations intend to expand the traditional definitions of “joint employer.” Businesses that use outsourcing, franchising or sub-contracting should take note of this rapidly shifting environment.
- What should a franchisor do to avoid being deemed the employer of others’ employees? In Franchisor Liability for Franchisee Employees: Damn Weasels, we explore this critical question.
- The model in which each silo in a supply chain was responsible for its sins is gone. These days, it is increasingly likely you may find yourself doing penance for the sins of your supply chain.
- Dr. David Weil is the Administrator of the Wage and Hour Division of the US DOL. What does his partisan appointment mean for employers?
- It is not the case that hiring “leased employees” absolves you of liability. Country music can be your guide – after all, “you’re known by the company you keep.”
- Why Private Equity Funds Face Employment Risks – we help you sort out the issues.
- Courts may impose liability on successors “when necessary” to protect and vindicate employment-related policies arising under employment statutes. Find out more in Successor Liability For Employment-Related Claims: A Pain In The Assets.