From JDSupra, Paul Mengel discusses two recent Fourth Circuit Court of Appeals cases in which a company that engaged with a subcontractor was found to be a joint employer. This is important for companies who engage with subcontractors who hire independent contractors because they might be held to be joint employers and responsible for any misclassification of the subcontractors’ workers. Paul writes:
two entities are not “completely disassociated” with respect to a worker, and thus are joint employers, 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 entities’ combined influence over the essential terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor.” Salinas, at p. 4. The Court then laid out six factors that should be considered in answering the question of joint employment in light of the foregoing two-prong test:
- Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to direct, control, or supervise the worker, whether by direct or indirect means;
- Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to-directly or indirectly-hire or fire the worker or modify the terms or conditions of the worker’s employment;
- The degree of permanency and duration of the relationship between the putative joint employers;
- Whether, through shared management or a direct or indirect ownership interest, one putative joint employer controls, is controlled by, or is under common control with the other putative joint employer;
- Whether the work is performed on a premises owned or controlled by one or more of the putative joint employers, independently or in connection with one another; and
- Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate responsibility over functions ordinarily carried out by an employer, such as handling payroll; providing workers’ compensation insurance; paying payroll taxes; or providing the facilities, equipment, tools, or materials necessary to complete the work.