Dive Brief:
- Pennsylvania-based book binding company Fox Bindery Inc. and its owner have agreed to pay $598,366 in back wages, damages, penalties and liquidated damages to settle charges that it violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act (FLSA).
- According to the U.S. Department of Labor's Wage and Hour Division (WHD), the company obtained workers through temporary employment agencies and operated as a joint employers. WHD said the employment agencies knowingly failed to pay the temporary workers for hours they worked over 40 in a workweek and knowingly paid employees who worked for Fox less than the federal minimum wage. Investigators also alleged that Fox made no efforts to determine whether the workers were properly paid, even though it received detailed invoices from the agencies. Sharing the settlement are 556 current and former employees.
- Fox and its owner have agreed to change its business practices, WHD said.
Dive Insight
Joint employment has emerged as a major issue in franchising, contracting, temporary staffing and other arrangements in which companies use workers they do not employ in the traditional sense. Under both the National Labor Relations Act (NLRA) and the FLSA, joint employment liability remains somewhat of a gray area. DOL recently announced plans to tackle joint employment under the FLSA via regulation, explaining that it wants to clarify joint employment relationships because changes in the 21st century workplace are not reflected in the current regulatory framework.
The National Labor Relations Board on Jan. 14 extended the public comment period for its proposed rulemaking that will define joint employer status. The rule would consider an employer to be a joint employer only if two employers share or co-determine employees' essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.
For now, businesses need to carefully consider the implications of contracting arrangements.
