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WHO’S THE BOSS? LIABILITY AS JOINT EMPLOYER?

QUESTION: I was hired by a staffing agency to work on a year-long project for a company doing work on a federal contract. I work full-time on the federal contractor’s site, using their equipment, and am supervised by a manager for the federal contractor. My employer, the federal contractor, keeps track of my hours, but I receive a paycheck from the staffing agency. The staffing agency offered a health plan, but it cost about $500 per month, and didn’t pay for anything until I had met a $7,500 deductible, so I couldn’t afford it. My employer, the federal contractor, didn’t offer a health plan. I do the same work as people who work directly for my employer, but I don’t receive any vacation time, paid time off for National Holidays, or any other benefits. My paycheck is issued by the staffing company, but that’s the only time I deal with them. I’m happy to be working, but it doesn’t seem quite right that neither the staffing agency or my employer – and these are both big companies — have to pony up for health insurance or holidays. What’s the story?

ANSWER: The question is whether the staffing agency is your employer, or whether the federal contractor and the staffing agency joint employers. Under the Obama administration, the Department of Labor cracked down on arrangements similar to those you describe, and often found the staffing agency and the “employer” were joint employers and could be jointly held liable for following the Fair Labor Standards Act (FLSA). The Department of Labor under the current administration may be less likely to find a joint employment relationship. The FLSA does not require an employer, even a joint employer, to pay for national holidays – although it does govern things like minimum wage, overtime, and unemployment insurance.

What is less clear is whether employers/staffing agencies can avoid complying with the federal Affordable Care Act—Obamacare – which requires employers to offer insurance that pays for at least 60% of the covered health care expenses for a standard population, and cannot require employees to pay for more than 9.69 percent of their household income for the employer coverage.

The basic test for finding a “joint employer” relationship is subject to an “economic realities” test which should demonstrate whether a worker is economically dependent on and therefore employed by, one of the employers or both:

• Does the other employer direct, control, or supervise (even indirectly) the work?
• Does the other employer have the power (even indirectly) to hire or fire the employee, change employment conditions, or determine the rate and method of pay?
• How permanent or lengthy is the relationship between the employee and the other employer?
• Does the employee perform repetitive work or work requiring little skill?
• Is the employee’s work integral to the other employer’s business?
• Is the work performed on the other employer’s premises?
• Does the other employer perform functions for the employee typically performed by employers, such as handling payroll or providing tools, equipment, or workers’ compensation insurance, or, in agriculture, providing housing or transportation?

To answer your question, we would need to know more about your income, the plan, and your household income to determine if the employer/staffing agency complied with the law. This is a complex area of the law – with court decisions taking opposite positions on similar facts. You may wish to consult with an attorney, to find out if the staffing agency and the federal contractor have honored your rights.

The lawyers at GWINN TAURIAINEN PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at www.gwinntauriainenlaw.com.

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GWINN TAURIAINEN PLLC, is a Troy based law firm representing clients from Warren, Sterling Heights, Ferndale, Royal Oak, Oak Park, Oakland and Wayne Counties and all of Southeast Michigan

ASK THE LAWYER
By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN TAURIAINEN PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
(248) 247-3310 facsimile
[email protected]
http://www.gwinntauriainenlaw.com/