February 2, 2016
By Steven Wishnia and Neal Tepel
Washington, DC – With an increasing number of U.S. employers cutting costs by hiring workers through temporary agencies or subcontractors—and using that outsourcing to avoid responsibility for working conditions—the Department of Labor on Jan. 20 issued guidelines for defining “joint employers.
It defined “horizontal joint employment” as when two separate companies share responsibility for a job, such as in a fast-food restaurant owned by a franchisee, and “vertical joint employment” as when an employer hires workers through an outside group to do functions “integral to the business,” such as a hotel hiring housekeepers from an agency. In either case, it said, a company can legally be considered a joint employer if the employee works on its premises or if it handles payroll for the worker, is involved in hiring or supervising them, or sets their hours and schedules. The International Franchise Association objected before even seeing the guidelines. “This is just another example of regulatory fiat that raises even more questions for employers,” said senior vice president Matt Haller. “The administration should consider going through formal rulemaking instead of just issuing a ‘guidance’ without even an outreach to targeted industries who may be impacted.” Read more