New DOL Warnings for Joint Employment

In a big, recent development for overtime law, the Department of Labor says that companies should take responsibility for indirect hires – a warning to clients of temporary staffing agencies.

Last October, the DOL found that temporary workers at a snack food producer in New Jersey had been cheated out of overtime wages. In response, the DOL ordered the company, not the staffing agency, to pay back wages and penalties.

What is important to take away here is that even temporary workers from staffing agencies may be entitled to overtime wages from their place of employment.

In recent decades, corporations have popularized subcontracting, outsourcing, and similar practices so that they can focus on the bigger picture while other businesses take care of the day-to-day. Many businesses see this option as cost-effective and convenient, removing the tedium of scaling up and down their labor force, adding payroll, etc.

Another less talked about consequence of hiring temp workers and outsourced employees is the protection it offered managers from any misconduct committed by the labor provider – until now. The Director of the DOL’s Wage and Hour Division, David Weil, has come out and said that companies and their subcontractors should really be considered “joint employers” in the eyes of the law – bad news for companies who think outsourcing can shield them from liability.

DOL representatives see two sides to the issue. There are people who simply don’t know the law, so their liability is out of ignorance rather than overt noncompliance. There are others “who are clearly playing games,” said Weil.

DOL investigations have revealed problems across all sorts of industries, from agriculture and construction to shipbuilding and manufacturing.

Our goal as employment and overtime claims attorneys is to make sure employees get the money to which they are entitled. To find out if you are entitled to recover compensation, overtime wages, and back wages, contact us today for a free review of your case.