One of the hottest topics right now in the labor and employment world is how far the government will go in finding a company liable as a “joint employer.” From large corporations that operate franchises across the country to small companies that utilize temporary staffing, government agencies have been expanding the concept of a “joint employer.” Recently, the National Labor Relations Board (NLRB) found that McDonalds could be held “jointly” liable along with its franchisees for federal labor violations. Now, the U.S. Department of Labor (DOL) has weighed in on the “joint employer” issue with respect to leave under the Family and Medical Leave Act (FMLA). See Fact Sheet No. 28N at http://www.dol.gov/whd/regs/compliance/whdfs28n.htm .
Many small and medium-sized employers don’t realize that FMLA obligations may extend beyond their workforce. Suppose your Company utilizes temporary workers from a staffing agency at your production facility. You find out that one of the workers has been seriously injured in a car accident and will need to undergo surgery for at least six weeks as well as rehabilitation. Although you sympathize with the situation, you immediately request the staffing agency to find a replacement worker. What are your obligations when the injured worker is ready to come back? Let’s do a quick review.
Under the FMLA, an employee who has worked for an employer at least 12 months and has worked at least 1,250 hours during the 12 months preceding leave, is entitled to up to 12 weeks of unpaid leave if he or she suffers from a serious medical condition. After leave, the worker must be reinstated to the same job or to a substantially equivalent job in terms of pay, benefits and responsibilities. An employer must have at least 50 employees within 75 miles to be covered under the FMLA.
Suppose the temporary worker has worked at least 1,300 hours for the staffing agency (and your company) over a 12-month period before the injury. Who is the employer? The DOL regulations address this issue. If your company and the staffing agency have at least 50 employees within 75 miles and if you control the work, you would be considered a joint employer under the FMLA. For example, suppose you check your records and you have 40 employees on your payroll. Does that mean you are not covered by the FMLA? You will be if you have at least 10 workers supplied by the staffing agency. Under the regulations, you have to count those employees when determining FMLA coverage.
Under this scenario, the staffing agency would likely be considered the “primary” employer responsible for providing any required notices and following up to determine how long the individual will need to be out. Your Company would be considered a “secondary” employer. The staffing agency would be expected to reinstate the worker to the same or a substantially similar job. If your Company is still using a staffing agency to fill the job that the worker had prior to the accident, you will have to accept that individual back to work or the worker could sue your company claiming interference or retaliation under the FMLA.
When a joint employer relationship exists under the FMLA, it is important to know who is the primary and the secondary employer. As the DOL points out, this determination depends upon “the particular facts of the situation.” The main factors include: (1) who has the authority to hire and fire and to place or assign work to the employee; (2) who decides how, when, and the amount that the employee is paid; and (3) who provides the employee’s leave or other employment benefits. In temporary staffing situations, the staffing agency is most commonly considered the primary employer. Here is a summary of the obligations:
Obligations of Primary Employer
- Provide all FMLA notices to employees as well as medical leave.
- Maintain group health insurance benefits during leave.
- Restore the employee to the same or an equivalent job upon return.
- Keep all records required by the FMLA.
Obligations of Secondary Employer
- Refrain from interfering with a jointly-employed worker’s attempt to exercise FMLA rights, or from firing or discriminating against the individual for exercising FMLA rights.
- Restore the worker to the same or an equivalent job upon return – for example, when the secondary employer is a client of the staffing agency and continues to utilize the services of the agency.
- Maintain basic payroll and identifying employee data with respect to any jointly-employed employees.
Don’t overlook temp workers under the FMLA. When utilizing a staffing agency, you should make sure that they have adopted proper FMLA practices and procedures to comply with all legal obligations. It would be prudent to confirm this in your staffing agreement if a combination of your workforce and temporary employees exceed 50 workers and temporary employees are utilized for extended periods.