Sara Boyns, Workplace Law: Joint employer concerns - Monterey Herald
Q: We use a staffing agency to provide workers during busy times throughout the year. Even though we do not directly hire these employees, I am wondering if we can be held responsible in case one of them files a claim for unpaid wages or gets hurt on the job. Should I be worried?
A: In California, there are at least two “joint employer” theories that could impose liability on businesses that contract with staffing agencies or other types of labor contractors. Under Labor Code 2810.3, certain employers may be jointly liable for wage and hour violations committed by “labor contractors,” such as staffing agencies. Generally, a business with 25 or more employees that contracts with a staffing agency will share all civil legal responsibility and civil liability for all non-exempt employees supplied by that staffing agency for:
• The payment of wages; and
• Failure to secure valid workers’ compensation coverage.
However, joint liability under this law does not apply to:
• A bona fide nonprofit, community-based organization that provides services to workers;
• A bona fide labor organization or apprenticeship program or hiring hall operated pursuant to a collective bargaining agreement;
• A motion picture payroll services company;
• In certain circumstances, a third party who is a party to an employee leasing arrangement;
• A homeowner for labor or services received at the home or the owner of a home-based business for labor or services received at the home;
• Workers who are independent contractors; and
• Certain motor carriers, household movers, cable operators and motor clubs.
Labor Code 2810.3 requires an aggrieved employee to provide the business that contracts with the staffing agency at least 30 days’ notice of a claim prior to filing a civil action against the business for violations of this law.
Joint liability for wage and hour violations can also arise when a business exercises direct or indirect control over a worker supplied by an intermediary entity like a staffing agency. California’s Industrial Welfare Commission Wage Orders define an employer as “any person … who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.” A September 2021 case, Medina v. Equilon Enterprises, held that joint employment exists when the business exercises enough control over the intermediary entity to indirectly dictate the wages, hours, or working conditions of the employee. In the Medina case, Shell Oil contracted with a multi-site operator to run its gas station. Mr. Medina was an employee of the multi-site operator. The multi-site operator was responsible for hiring, firing, training, disciplining and maintaining payroll records for the multi-site operator employees, and Shell provided “detailed instructions for compliance with labor laws.” The multi-site operator did not have discretion to modify the tasks that were performed by employees like Mr. Medina. Based on these facts, the court held that Shell and the multi-site operator were joint employers that could be liable for Mr. Medina’s unpaid wages because Shell exercised enough control over the intermediary entity to indirectly dictate the wages, hours, or working conditions of Mr. Medina.
Businesses that use intermediary entities to supply workers should be aware of the joint employment risks and specifically address issues such as compliance with California labor laws, workers’ compensation laws, and indemnity in the written services agreement between the parties.
Sara Boyns is a lawyer with Fenton & Keller in Monterey. This column is intended to answer questions of general interest and should not be construed as legal advice. Email queries to [email protected].
source: https://www.montereyherald.com/2022/04/28/sara-boyns-workplace-law-joint-employer-concerns/
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