Federal Appellate Court Expands Definition of “Joint Employer” Under the FLSA

interviewThe modern workplace often involves complex relationships among employers and between employees and employers. An individual employee might have an employer that issues their paychecks but has them work at the site of, or under the direct supervision of, a different employer. Should an employee need to assert a cause of action under an employment statute like the Fair Labor Standards Act (FLSA), a clear definition of the employee-employer relationship is critical. Federal caselaw and regulations establish guidelines for identifying “joint employers” for the purposes of the FLSA and other statutes. A recent decision from the Fourth Circuit Court of Appeals expands the definition of “joint employer” beyond the definition used in the Third Circuit, which includes New Jersey and other jurisdictions. Salinas v. Commercial Interiors, Inc., No. 15-1915, slip op. (4th Cir., Jan. 25, 2017).

The FLSA governs wage and hour issues, establishing a nationwide minimum wage and requiring employers to pay non-exempt workers time-and-a-half for work in excess of 40 hours in a week. The statute provides some of the broadest definitions of certain key terms in the entire United States Code. It defines “employee” as “any individual employed by an employer,” and its definition of “employ” merely states that it “includes to suffer or permit to work.” 29 U.S.C. §§ 203(e)(1), (g). It does not provide a distinct definition of “employer.”

Regulations promulgated by the U.S. Department of Labor (DOL) note that the FLSA does not limit individual employees to one employer. The DOL attempts to distinguish between “joint employment,” in which multiple employers employ an employee in a single position, and “separate and distinct employment,” in which an individual employee has more than one job with different employers. 29 C.F.R. § 791.2(a). Under DOL regulations, a “joint employment” situation may exist when two or more employers have “an arrangement…to share the employee’s services,” when one employer “act[s]…in the interest of the other employer (or employers),” or when one employer is partly or wholly under the control of another employer. Id. at § 791.2(b).

The Third Circuit uses a set of four factors in determining whether an employer is a “joint employer” under the FLSA:  (1) whether the employer can hire or fire employees; (2) the employer’s authority to assign work and “set conditions of employment”; (3) “day-to-day supervision”; and (4) “control of employee records.” In re Enterprise Rent-A-Car Wage & Hour Emp’t Practices Litig., 683 F.3d 462, 469 (3d Cir. 2012); see also Thompson v. Real Estate Mortg. Network, 748 F. 3d 142, 148-49 (3d Cir. 2014). With regard to other statutes, the Third Circuit has held that the FLSA’s definitions are too broad, and it has therefore declined to apply Enterprise. See, e.g. Faush v. Tuesday Morning, Inc., 808 F. 3d 208, 213-14 (3d Cir. 2015) (declining to apply Enterprise to joint employer claims under Title VII of the Civil Rights Act of 1964).

In Salinas, the Fourth Circuit identified six factors courts should consider, noting that the list is not exhaustive. The list incorporates the four Enterprise factors and adds considerations about “the degree of permanency and duration of the relationship between the putative joint employers,” control over the premises where work is performed, and common control over the employees, if any. Salinas, slip op. at 31-32. This list is not binding on New Jersey courts, but it could influence future Third Circuit decisions.

If you need to speak to an attorney about a New Jersey or New York overtime matter, contact the Resnick Law Group today online, at 973-781-1204, or at 646-867-7997.

More Blog Posts:

When Does Commuting Time Count as “Work” in New Jersey? The New Jersey Employment Law Firm Blog, March 31, 2017

New Federal Overtime Rule Blocked by Judge, Faces Uncertain Future, The New Jersey Employment Law Firm Blog, February 9, 2017

New Laws, Regulations Regarding Employee Sick Leave Set to Take Effect in New Jersey, The New Jersey Employment Law Firm Blog, November 11, 2016

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