NLRB’s Definition of “Employer” Could Have Wide-Ranging Effects

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By Andrew Kimble

On August 27, 2015, the National Labor Relations Board redefined “joint employers” in a way that will impact the rights of workers in a broad range of industries.

The case addressed whether a waste management firm, Browning-Ferris, should be held responsible for labor violations committed by their contractors.  The NLRB concluded that Browing-Ferris was a “joint employer” of their contractors’ employees, because the two companies “share or co-determine those matters governing the essential terms and conditions of employment.”  As a result, both joint employers could be required to collectively bargain with the contracted employees, and were responsible for their contractor’s labor practices.

This is a notable departure from previous rulings, where the NLRB held that companies were responsible only for those working under their direct control.  But on Thursday, the Board said that the old standard was “increasingly out of step with changing economic circumstances.”  The decision comes in response to the growing trend in the U.S. for companies to employ temporary workers and contract workers through staffing agencies or other third parties.  This arrangement allows large companies to disclaim responsibility for the conditions of employment while leaving employees in limbo between the company that is listed on their paycheck and the company that directs their work.

Two dissenting NLRB appointees railed against the decision, saying it “dramatic implications” on labor relations policy and its effect on the economy.  Exactly what effect it will have is to be determined, but business groups are concerned that the franchisor-franchisee relationship is in danger.  While the decision does not address franchises, its logic can easily be extended to such arrangements.  If it is, franchisors will have increased responsibility in a broad range of industries, including hotels and hospitality, restaurants and fast food chains, manufacturers, construction firms, retail workers, and staffing agencies.

If you are an independent contractor, work for a staffing agency, or your work is subject to the control of two or more companies, you should contact an employment attorney to better understand your rights.  Call Kimble Law Office today for a free consultation.

D.C. Court of Appeals Upholds Department of Labor Regulations Granting Minimum Wage and Overtime to Home Care Workers

By Andrew Kimble

A three-judge panel on the U.S. Court of Appeals for the District of Columbia upheld recent Department of Labor regulations today that extend FLSA minimum wage and overtime protections to home care workers who work for third-party companies.  Read the opinion here: Home Care Association v. Weil.

Until recently, the Department of Labor considered live-in home care workers and workers providing “companionship services” to be exempt from the Fair Labor Standards Act’s minimum wage and overtime requirements, no matter if they were employed directly by the individual or family to whom they provided services or by a third-party provider.   In 2013, the DOL adopted regulations stating that third-party providers could “no longer avail” themselves of this exemption, and therefore live-in home care workers and those providing “companionship services” were entitled to minimum wage and overtime.  The DOL reasoned, among other things, that the nature of the home care industry had changed since the previous regulations were adopted in 1975.  Demand for long term home care has grown exponentially, with fewer families opting for institutionalized care, and technological advances allowing for more complex care to take place in the home.  As a result, it is rare today for families or individuals in need of home care services to hire and employ home care workers directly.  Instead, they contract for services through third-party providers.

Before the new regulations were implemented on January 1, 2015, Home Care Association v. Weil was filed in a D.C. district court, challenging the DOL’s authority to implement the regulations.  In 2014, the lower court agreed with the third-party provider-plaintiffs, invalidating the DOL regulations on the grounds that they contradicted the terms of the FLSA.

Today, however, the Court of Appeals reversed and remanded the lower court’s decision in favor of the Department of Labor.  Circuit Judge Sri Srinivasan explained that the specific issue of whether the exemption applied to employees of third-party providers was “among the  details that the statute leaves the agency to work out.”  He continued to conclude that the agency’s interpretation was reasonable in light of the changes in the industry.  The court also analyzed states in which state law already required these employees to be paid overtime, and concluded that it has not caused a significant increase in the cost of home care or the usage of institutionalize care.

The decision is a major victory for home care workers who work for third-party providers around the U.S., who will be entitled to the full protections of the FLSA after the new regulations are implemented.  If you are a home care worker for a third-party provider and you are denied minimum wage or overtime, contact an employment attorney to better understand your rights.