Legal Blog

Who is your employer? The perils of Joint Employment under the FLSA

“Who is your employer?”  That sounds like a simple question with a simple answer and, to most employees, it is as simple as it sounds.  However, as is often the case, the law adds several levels of complexity to what, on its surface, is a fairly straightforward question.  Specifically, under the Fair Labor Standards act (“FLSA”), the federal law that governs minimum wage and overtime, the definition of employer is far broader than what you might think.  In fact, even managers or owners that control the terms and conditions of an individual’s employment can be considered an employer.

In a recent decision, the U.S. Fourth Circuit Court of Appeals, which covers Maryland, addressed the question of joint employment.  Joint employment is the legal theory by which more than one entity or individual can be considered an employer.  The Fourth Circuit explained that joint employment exists “when (1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine—formally or informally, directly or indirectly—the essential terms and conditions of a worker’s employment and (2) the two entities’ combined influence over the essential terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor.”

This means that businesses that utilize another company’s labor force or that engage in joint ventures may very well be exposed to significant liability for the mistakes made by another company’s payment of wages to employees.  These risks can be reduced by sound and strategic decision-making, but most businesses do not even realize the risk until it is too late.

ABOUT RUSSELL BERGER

rberger@offitkurman.com | 410.209.6449

Russell Berger is an accomplished labor and employment attorney who is well-versed in litigating in both state and federal courts, as well as providing counsel to employers on employee matters. He represents employers, businesses and professional clients in employment disputes throughout the country. Mr. Berger primarily focuses on litigating and counseling clients regarding matters of minimum wage and overtime under the Fair Labor Standards Act and state laws, wrongful termination, non-compete agreements, and employment and severance agreements. Mr. Berger’s practice also includes handling claims and providing counsel regarding retaliation, discrimination and harassment (under Title VII and state anti-discrimination laws), as well as under other federal statutes, such as the Family Medical Leave Act (FMLA), the Age Discrimination in Employment Act (ADEA), and American with Disabilities Act (ADA). He also provides general counsel to businesses, including with respect to commercial, contracting, and insurance matters.

 

ABOUT OFFIT KURMAN

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