More Than You Bargained For: Mitigating Joint Employment Risks Presented by Christie Totten and Shelley Spandorf For the Oregon Winegrowers Association

Agenda What is joint employment? Why is it a hot topic right now? Why should my business care? When might joint employment exist? What can I do about it?

What is Joint Employment?

Joint Employment Joint employment: One person has two (or more) employers for the same work.

Horizontal Joint Employment One employee shared between two related businesses. Horizontal JE: Two wineries (separate entities) share common management. Each employs Sara in their own tasting room. Example: Jose works at two separate vineyards. The vineyard owners agree to swap workers back and forth as needed. If close relationship between the two entities, they may be deemed joint employers. Result:

Vertical Joint Employment Vertical JE: Employee of Employer A is also economically dependent on or controlled by Employer B. Example: Farmworker is employed by Farm Labor Contractor. FLC brings worker to prune vines on grower’s land. Result: If sufficient factors exist, grower may be deemed a joint employer.

Case by Case Multi-factor tests FLSA – 9 factor test (29 CFR 791) MSPA – 7 factor economic realities test (29 CFR 500.20)

Vertical Joint Employment Analysis (Step 1) Is the intermediary employer (contractor) itself an employee of the grower? If yes  STOP. All of the contractor’s employees are also the grower’s employees. Example: Grower and FLC sign independent contractor agreement. But government decides FLC is economically dependent on the grower, and deems FLC an employee of the grower. Result: All of FLC’s farmworkers are also the grower’s employees.

Vertical Joint Employment Analysis (Step 2) If no  ANALYZE factors to decide if contractor’s employees are jointly employed by the grower. Direction & control Hire/fire authority, direct or indirect Permanency & duration of relationship Low-skilled and repetitive services Activities an integral part of the grower’s overall business operations Work performed on the grower’s premises Whether the grower assumes employer responsibilities (e.g. payroll; workers’ comp; facilities, housing or transportation; tools, equipment or materials for the job.)

Example from the US. Dept. of Labor Admin Interpretation No. 2016-1: FLC: Hires & pays worker Grower: Dictates timing of harvest, which fields, daily schedule Trains unskilled labor Tracks amount picked per hour, pays per bucket Provides buckets, transports and stores fruit Withholds money for WC insurance Has same worker on the farm each harvest season DOL says: facts indicate joint employment

Why the focus now? More attention by government agencies (BOLI, DOL, EEOC, OSHA, NLRB) and courts Targeted attention on certain: Industries (including agriculture) Arrangements (including FLCs) DOL admin guidance: http://www.dol.gov/whd/flsa/ Joint_Employment_AI.htm

Why should I care if I am a joint employer? Joint Employer = obligations of an employer Joint Liability if labor supplier violates the law Employee chooses who to sue More employees may trigger new laws applying to your workplace (OFLA/FMLA, disability accommodations, overtime in tasting rooms, and more) Government investigations

How does this situation arise? FLC? Independent Contractor? Vineyard Management Company? Staffing Agency?

What can I do about it?

Steps

Ignore, Ignore, Ignore

Hands Off Identify and drop unnecessary practices that increase your risk Train your employees

Talk, Calculate and Think Talk: Is your labor provider aware of joint employment? Does it understand and comply with relevant laws? Do the Math: What is smallest number of employees you might have? The biggest? Assess Risk: How exposed are you? How much risk are you willing to tolerate?

Contract Review Understand: Your contract and tax forms do not control the joint employer determination General Terms and Control Superfluous language Defined terms Training, safety and policies

Contract Review Compliance with Laws FLC requirements List: “including but not limited to” Contractor agrees it is solely responsible for ensuring compliance with all federal, state, and local laws applicable to Services performed for Company, including, without limitation, paying wages, benefits, taxes, and required insurance; posting signage and notices; complying with hiring laws including immigration and background checks; protecting worker health and safety; granting required meal and rest breaks; accruing, granting, and recording paid leave under the Oregon Sick Time Law; and ensuring the work environment is free of harassment, discrimination, and retaliation based on any protected status.

Contract Review Risk allocation Employer Liability Law Insurance Indemnification, hold harmless, cost of defense, limits on liability Bond? Employer Liability Law

Audit

Audit Thorough Objective Privileged

Points to Remember Look at your workplace with objective eye Consider risks if deemed a joint employer Modify practices and contracts as needed

Shelley Spandorf rochellespandorf@dwt.com 213.633.6898 Christie S. Totten christietotten@dwt.com 503.778.5298