Over the past few weeks, we have advised our clients on matters relating to the use of third parties, recruiting companies and / or professional employers’ organizations (“PEOs”) to manage, staff or increase their workforce. If this is your organization, keep reading. We like to be proactive in making sure our entire network is aware of the issues that we frequently see within our customer base.
Of course, these additional manpower provisions are quite common and not necessarily problematic; However, it is important that our clients are aware of the legal concept of “joint work”. Joint employment occurs when two or more entities are so closely related in the management of a group of workers, that each the entity can be considered the employer for legal purposes.
You should be aware that the arm’s length nature of the relationship between your entity and workers who are not technically your employees Maybe not necessarily create a layer of protection or separation of legal liability associated with these workers. For example, it may be possible for a worker provided by a recruitment agency (and is technically employed by that recruitment agency) to sue your organization for discrimination or OSHA violations. Also, you should be aware that many employment laws are triggered by a number of employees and the concept of joint employer will add these additional workers to your totals (i.e. Title VII Civil Rights Act (15 employees), Americans with Disabilities Act (15 employees), Age Discrimination in Employment Act (20 employees), Family and Medical Leave Act (50 employees), etc.).
Here are some questions to help you determine if you can be in a joint employment relationship with another entity:
- Do you use a recruiting company or a third party to identify, interview or hire employees and / or contractors?
- Are your employees and / or subcontractors paid (in whole or in part) by a third party for the work performed at your place of business or operation?
- Do you rely on another company, entity or PEO, to provide training, manage human resources, payroll or benefits, for your employees and / or contractors?
- Does another company or organization exercise control over the day-to-day work of your employees and / or subcontractors (ie.
If the answer is “yes” to any of the above questions, you may be in a joint employment relationship with another entity. We are happy to speak with you to help you navigate the potential risks, responsibilities and issues regarding joint employment. Contact us today!