If you work in healthcare, hospitality, or any industry that relies on staffing agencies, franchise models, or shared employment structures, you’ve likely encountered the concept of joint employment. But what does it actually mean? And more importantly, how could it affect you or your clients?
Joint employment occurs when multiple entities—like a company and a staffing agency, or a franchisor and a franchisee—share control over an employee’s work. That shared control can lead to shared liability, especially in wage-and-hour disputes, discrimination claims, and union matters. With recent changes to federal rules and ongoing court decisions, understanding joint employment has never been more important.
What Is Joint Employment?
Simply put, joint employment happens when two or more entities have significant control over the terms and conditions of a worker’s job. That could include control over schedules, pay rates, hiring, firing, or daily supervision. For legal purposes, both entities may be considered “employers,” meaning they’re both responsible for complying with employment laws.
Common examples of joint employment include:
- A hospital and a staffing agency that places nurses at the facility.
- A contractor and a subcontractor at the same job site.
- A franchisor and a local franchise owner operating under a shared brand.
Joint Employment Under Federal Law
The FLSA Standard
The Fair Labor Standards Act (FLSA) sets minimum wage, overtime, and recordkeeping requirements for employers. In January 2024, the U.S. Department of Labor (DOL) issued a new rule expanding the circumstances under which an entity can be considered a joint employer.
This rule applies a “totality of the circumstances” approach, examining factors like:
- Who sets the work schedule?
- Who decides the pay rate and payment method?
- Who maintains employment records?
- Who controls hiring, firing, or discipline?
If the facts show that multiple entities share or codetermine these aspects of employment, then both are responsible for meeting the FLSA’s requirements.
The NLRB’s Broader Test
The National Labor Relations Board (NLRB) also uses a joint employment standard, but it focuses on the right to control essential working conditions, even if that control isn’t directly exercised. In 2024, the NLRB reinstated a broad standard that makes it easier to establish joint employer status in union-related matters. This is particularly relevant for companies that share policies and procedures with franchisees, as it can expose the larger corporation to unionization efforts and unfair labor practice claims.
But a heads up: The new Trump administration may well revert back to a more restrictive test for joint employment status. There are significant changes coming.
Joint Employment Under West Virginia Law
West Virginia doesn’t have its own joint employment statute, but its courts often follow federal standards in wage-and-hour and discrimination cases. For example, under the West Virginia Human Rights Act (W. Va. Code § 5–11‑1 et seq.), courts have looked at which entities have control over employment terms to decide liability. In Bowyer v. Hi-Lad, Inc., 609 S.E.2d 895 (W. Va. 2004), the state’s highest court considered whether multiple employers shared control, influencing its decision on discrimination claims.
For practical purposes, if you’re dealing with joint employment issues in West Virginia, federal guidelines and case law will heavily inform your legal approach.
Why It Matters
Joint employment isn’t just a technicality—it can have real consequences, including:
- Liability for wage violations: If one employer fails to pay overtime, the other could be held responsible as well.
- Increased compliance obligations: Recordkeeping, training, and ensuring that all applicable labor laws are followed now apply to both entities.
- Union and labor relations challenges: Under the NLRB’s broad rule, larger corporations might face unionization efforts if their local affiliates are considered joint employers.
Tips for Businesses
If you’re working with franchisees, staffing agencies, or subcontractors, consider these strategies:
- Review your contracts carefully. Ensure you’re not retaining unnecessary control over another entity’s employees.
- Clarify HR responsibilities. Don’t let supervisors give direct orders to workers employed by another company unless absolutely necessary.
- Maintain proper documentation. Make sure you can show how decisions on pay, scheduling, and discipline are made—and by whom.
- Stay informed. Keep an eye on federal and state legal developments, as joint employment standards can shift.
Final Thoughts
Joint employment is a complicated but critical area of employment law. Whether you’re a healthcare provider working with contract nurses or a franchisor managing relationships with franchisees, understanding how the law applies can help you avoid costly legal problems. Both employers and workers benefit when everyone knows who’s responsible for what.
By staying informed and proactive, businesses can ensure compliance, protect their bottom line, and foster a more transparent workplace.
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