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Your best response to the ‘joint employer’ rules

The Labor Department’s focus on “joint employment” arrangements has raised plenty of questions among employers that turn to staffing agencies.

Last month, the agency made it clear it thinks more companies should take responsibility for their contracted workforces, and it issued guidance that told them exactly how and when.

There are bad actors out there, no doubt, who, for example, try to deny workers overtime pay.

That’s why we think it’s critical for employers to select labor providers, e.g. temporary employment agencies, with good compliance records.
“(The Labor Department’s action) should not be of concern to staffing clients, as potential liability for temporary workers is the same as (and in some cases less than) liability for the client’s internal employees, and can be mitigated and controlled by clients,” American Staffing Association general counsel Stephen Dwyer wrote in an email.

By mitigated and controlled, Dwyer is saying exactly what we’re recommending: be careful about who you select as your preferred staffing partner.

The government’s action is, of course, aimed at employers who are egregious violators of labor laws.

“We … find cases of people who are clearly playing games, and clearly trying to shift out responsibility, and often have structured things in a way that lead towards more noncompliance,” David Weil, the administrator of the Labor Department’s wage and hour division, said.

Last fall, for example, investigators found that temp workers at a snack food producer in New Jersey were cheated out of overtime wages, and ordered the company to pay back wages, damages, and civil penalties.

The issue of joint employment is similar in nature to misclassification of employees as independent contractors, on which Weil’s office issued similar guidance last summer. It’s also related to the National Labor Relations Board’s recent decision on the definition of joint employment for the purpose of union organizing, which is likely to have a bearing on a massive McDonald’s case that’s waiting for a hearing in New York. That case has drawn the attention of franchise owners nationwide.

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