When does 1 + 1 = 1? . . . Joint Employer Coverage under the FMLA.

Think back a couple of posts ago to when we talked about a covered employer under the FMLA. I told you then that generally a single entity will be considered the employer under the FMLA unless it meets the joint employer test at § 825.106.  I also said we would talk about joint employers in a couple of weeks.  It has been a couple of weeks.

What, you say, is a joint employer?

(a) Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers, and facilities. Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:

(1) Where there is an arrangement between employers to share an employee’s services or to interchange employees;

(2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or,

(3) Where the employers are not completely disassociated with respect to the employee’s employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer.

29 CFR §825.106(a).

Now we are going to cut right through all of the mumbo jumbo and get right to the meat of the matter, because the most common joint employer relationship occurs when you retain a temporary employment agency to provide you with temporary employees.  Not a PEO, mind you, or a vendor or contractor that provides so-called turnkey services, but a real live temporary agency.

First thing you need to know is this:  You have to count your temps when determining if you have 50 employees and are a covered employer.   That’s right, temps count, for both you and the temporary agency.

(d) Employees jointly employed by two employers must be counted by both employers, whether or not maintained on one of the employer’s payroll, in determining employer coverage and employee eligibility. For example, an employer who jointly employs 15 workers from a temporary placement agency and 40 permanent workers is covered by FMLA.

29 CFR §825.106(d).

Here is the second thing you need to know.  The temp agency has to give all the required notices and do the paperwork and provide the leave and maintain benefits.  (All things we will talk about later.)

(c) In joint employment relationships, only the primary employer is responsible for giving required notices to its employees, providing FMLA leave, and maintenance of health benefits. Factors considered in determining which is the primary employer include authority/responsibility to hire and fire, assign/place the employee, make payroll, and provide employment benefits. For employees of temporary placement agencies, for example, the placement agency most commonly would be the primary employer.

29 CFR §825.106(c).

Now you may be thinking that is great, nothing for me to do and you would be wrong.  Less for you to do, but not nothing.  You have to give the temp their job with you back when they are ready to come back from leave.

(e) Job restoration is the primary responsibility of the primary employer. The secondary employer is responsible for accepting the employee returning from FMLA leave in place of the replacement employee if the secondary employer continues to utilize an employee from the temporary placement agency, and the agency chooses to place the employee with the secondary employer. A secondary employer is also responsible for compliance with the prohibited acts provisions with respect to its jointly employed employees, whether or not the secondary employer is covered by FMLA. See §825.220(a). The prohibited acts include prohibitions against interfering with an employee’s attempt to exercise rights under the Act, or discharging or discriminating against an employee for opposing a practice which is unlawful under FMLA. A covered secondary employer will be responsible for compliance with all the provisions of the FMLA with respect to its regular, permanent workforce.

29 CFR §825.106(e).

And that, my friend, is what a joint employer is – now you know.