The Fourth Circuit recently provided clarity to extant joint employer liability under the Fair Labor Standards Act (“FLSA”). Salinas v. Commercial Interiors, Inc., 848 F.3d 125, 141–42 (4th Cir. 2017).
The plaintiffs in the matter, former drywall employees for a subcontractor, brought FLSA, Maryland Wage and Hour, Maryland Wage Payment, and Collection claims against the subcontractor, its owners, and the general contractor. In determining whether the plaintiffs were jointly employed by the subcontractor, its owners, and the general contractor, the District Court for the District of Maryland applied a “novel multifactor test.” Ultimately, the test focused the court’s analysis on the legitimacy of the contract relationship between the putative joint employers and whether the relationship was intended to skirt federal and state wage requirements.
The Fourth Circuit rejected the district court’s test and, instead, set forth a new test that better embraced the FLSA’s broad definition of employee and inclusiveness. The test in large part follows the Department of Labor’s regulations regarding joint employment by focusing the analysis on relationship between the putative joint employers. As a result, the Fourth Circuit believes that these factors should prevent courts from blending the analysis of whether an employee is jointly employed and whether he or she is an independent contractor.
Under the new test, courts should consider six factors when determining whether an employee is jointly employed under the FLSA. Those factors are:
The Fourth Circuit emphasized that these factors are not exhaustive and the final determination must consider the facts of a particular case in their entirety. In summation, the court held that “joint employment exists when 1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine—formally or informally, directly or indirectly—the essential terms and conditions of a worker’s employment and (2) the two or more persons’ or entities’ combined influence over the terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor.”
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