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Joint Employment and the Contingent Worker

By Robert G. Brody and Katherine M. Bogard

In today's global economy, many companies are staffing through employee brokers, leases, or temporary agencies, franchises and other non-traditional arrangements. For instance, in 2013, the U.S. Bureau of Labor and Statistics estimated that 2,673,800 workers were employed in the temporary help services industry. Many of these contingent arrangements result in third parties, such as the temporary staffing agency, employing the workers ' not the company on whose behalf the work is being performed (the “putative joint employer,” i.e., where the temp is assigned). For instance, this is a common relationship that exists within the catering world in large metropolitan cities, such as New York City or alternatively in manufacturing distribution hubs, such as Memphis, TN. These arrangements generally allow the putative joint employer to minimize or even avoid functions such as recruiting, screening, hiring, paying workers, and complying with labor and employment laws. This avoidance, however, often comes with significant risks.

Over the last few years, government agencies have reacted to this trend by increasingly finding that both companies are employers and as such, both are jointly and severally liable for any issue involving the employees. The National Labor Relations Board, Title VII of the Civil Rights Act of 1964, as amended, and the Occupational Safety and Health Administration (OSHA) have long been on board with this outcome. Not one to be left out, the federal Department of Labor (DOL) recently issued instructive administrative guidance on this exact issue.

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