Did you know two entities may be jointly and severally liable as employers for minimum wage and overtime violations brought by an employee?

Under federal and state employment laws, employers have a legal obligation to compensate their workers for labor and services performed. The U.S. Department of Labor enacted the Fair Labor Standards Act which “establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.” [1] The federal minimum wage for covered nonexempt workers is $7.25 however states have different minimum wage laws. [2] Covered nonexempt employees must also receive overtime pay at a rate of not less than that one and one-half (1 ½) times their regular pay rate if they have worked over forty (40) hours in one work week. [3] This means that employers should comply with these standards set by the FLSA and ensure that employees are getting paid for their work. 

 In addition, under the FLSA, an employee can have more than one employer under the theory of joint employment. The joint employer theory provides that a direct employer of an employee can be sued for violating the FLSA, along with another company. The direct employer may be “constructively employed” by that second employer or the “putative joint employer” under certain circumstances, such as where the second employer is exercising sufficient control or overseeing the employee. [4] This may occur in cases such as where the second employer is a big corporation or a franchisor, where they might employ workers through a staffing agency, or many other situations. If joint employment exists, an injured employee may be able to recover from either of the employers for their full amount of damages that they suffered. Although the factors are similar, the test for determining joint employer relationship vary in different states. If you believe your employer has failed to comply with their legal obligations, it’s best to contact your local attorney for help with the situation.