Random Employee-Employee Relationships: Extra Than You Anticipated | Greenberg Glusker LLP
Regardless of your company – design, production, talent management – you are likely to focus on your actual core strengths, contracting out outside vendors for jobs like security, janitorial maintenance, and website design. While one of the main benefits of such third party suppliers is keeping your own workforce lean and manageable, an unfortunate and unexpected side effect of such supplier relationships is that you may actually be a joint employer of your suppliers’ employees.
Why does that matter? As a joint employer, you can be held jointly and severally liable if the seller does not comply with applicable federal and state labor laws, e.g. B. Pay minimum wage and overtime, take rest and meal breaks, and issue detailed pay slips that meet the requirements of California Labor Law. It can be very confusing to find out your first time co-employers when you are served with a lawsuit by an employee of your vendor. Trying to break out of this lawsuit and think it must be a mistake can be very frustrating and almost futile. Trying to defend yourself when you don’t have access to underlying employment records for someone who claims to be your “joint” collaborator is downright scary. As always, the best defense is to anticipate the problem and prepare to solve it.
Step 1: Determine the likelihood of joint employment
The main requirement for joint employment is that an employee can be employed by more than one employer (general and specific) at the same time. Accept this reality. Enforcement agencies and courts routinely interpret the term “employer” largely in favor of workers, and federal and state tests to determine the existence of a joint employment relationship vary slightly. Most often, the tests focus on the economic realities of the relationship and the degree of control that the company claiming to be a joint employer maintains.
A joint employment relationship is likely to exist when one company (the general employer) hires, provides and pays an employee, while another company (the particular employer) directs and supervises the work itself. The analysis is very factual and applies to business relationships between mother and daughter as well as real relationships with third parties.
Step 2: Review the supplier contracts
If there is ever a slim chance of a joint employment relationship, even a temporary one, it is important to have a written contract with the outside provider. In addition to other important provisions, this contract should expressly regulate what happens if there is a joint employment relationship and who will provide defense in the event of a lawsuit by the seller’s employee. If you are only using an invoicing system with suppliers and you have no contracts, you should double-check with your lawyer. If you have contracts with your suppliers but they don’t protect you, you should negotiate important revisions to your supplier contracts or find suppliers to work with you on these issues. They should be ready to stand by their own employment practices.
Step 3: Practice What You Preach
In addition to a supplier contract that specifically assigns responsibilities and liabilities, it is equally important to train your own employees to minimize the chance of becoming a joint employer. In some cases, the level of interaction can be so high that common engagement is inevitable. In many cases, however, it is the micromanagement and over-participation of the particular employer that convert the relationship into joint employment. Although not a single factor is decisive in itself, the more control you have over wages, hours or working conditions, the more certain that a joint employment relationship exists.
Originally published in the January / February 2021 issue of the Entertainment Human Resources Network and Los Angeles Advertising Human Resources Professionals newsletter.