Home-based care providers in 2023 should stay on top of regulatory and compliance changes to federal joint employment laws.
In the eyes of the Fair Labor Standards Act and the National Labor Relations Board (NLRB), “joint employment” means working for two or more companies, one that is responsible for their W2s and compensation and a secondary that also benefits from their services. This includes workers from staffing agencies and franchisors, among others.
Joint employment laws are particularly relevant to home-based care, Angelo Spinola — the co-chair of the home health and home care industry group at the law firm Polsinelli — said Thursday on a WellSky webinar.
“If joint employment exists, then there is joint liability,” Spinola said. “That means that both entities, or however many entities there are that are deemed joint employers, are considered as though they are one entity for liability purposes. It has significant repercussions in our industry. In franchisor relationships, it’s a very, very common issue.”
A common scenario in home care, Spinola said, is that an owner of two independently incorporated businesses deploys employees across them both, even though they have and have separate payrolls.
That owner may believe that they’re not a joint employer because they are in fact separate entities.
However, if that owner is coordinating the work back and forth between the two entities, the federal government may consider them a joint employer under FLSA laws.
“Let’s say an individual worker performed 30 hours of work for one entity and 20 hours of work for the other. That individual worker would be entitled to 10 hours of overtime in that work week,” Spinola said. “Both entity A and entity B would be equally responsible for paying that overtime, regardless of where the overtime was actually worked.”
While shuffling is ongoing in Washington D.C. following the midterm elections, it’s important for home-based care providers to stay on top of these potential changes.
Particularly when it comes to the NLRB, who’s responsible for protecting workers’ collective bargaining rights.
“For purposes of joint employment, it’s a pretty significant issue,” Spinola said. “From a union perspective, if you have joint employment situations, that broadens the pond. The pot is much bigger. Instead of organizing at a micro level or an individual franchisee level, you can organize for the whole system or you can organize between multiple businesses.”
Having joint employment will also make it easier for the Department of Labor to investigate, seeing as though hypothetically the entity would be under one roof.
Also, the pendulum in home-based care could swing back from reliance on independent contractors towards pro-union policies, Spinola indicated.
Policymakers are already considering proposed revisions to joint employment rules that would change how you determine whether someone is an independent contractor or an employee. Those changes would – in part – affect the analysis of whether a potential employer is exerting control over a caregiver.
Spinola said this is the Biden administration’s turn to change the tides on the issue, reflecting the growing influence of the “gig economy.”
For many providers, changes to rules around independent contractors, or those for joint employment, will have similar effects.
“The economic realities test is the same test used to determine whether somebody is a joint employer,” Spinola said. “All the things that we just talked about around joint employment for union organizing purposes are going to equally apply here to wage and hour issues.”
Spinola said that in order to avoid misclassification with independent contractors, providers should have well-drafted agreements that tip the scale in favor of independent contractor relationships.
Providers should also analyze control mechanisms at play in the employer/employee relationship and determine whether a worker can be paid per job instead of hourly.
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