Joint Employment Concept Gets Really Broad Under FLSA

Joint employment is a constantly shifting concept. Would the current test apply to religious organizations? Think through the factors of a joint employer relationship.

Joint Employment Could Be Really Broad

While it depends on which administration is in office, the National Labor Relations Board and other government agencies tend to push toward finding joint employment. Why does joint employment matter? For example, instead of tracking hours just for one organization, the company could wind up owing overtime when the employee works for the other organization as well and goes over 40 hours. Or, when two businesses are found to be joint employers, both may be responsible for ensuring compliance with overtime, minimum wage, and proper record keeping. This can increase the risk for companies using contractors, staffing agencies, franchisors and franchisees, any outsourced labor, co–managed workplaces, missions seconding employees to other organizations, or other shared work arrangements in businesses and ministries. Because of this, organizations should pay close attention to how their relationships are structured, regularly review staffing and vendor contracts, and avoid risks of legal penalties.

Who's the Boss, Anyway—a Real Life Example? 

In one case, Contractor employed several drywall installers. (1) Contractor did most of its work for another company, Commercial. These drywall installers sued both companies, claiming that they worked for both Contractor and Commercial, and their hours had to be aggregated. As the court considered it, the facts showed a lot of overlap and ambiguity as to who was really the employer, as both entities were acting as employers in different circumstances, providing direction, materials, and so on. Commercial provided tools and equipment and actively supervised the work. It made employees come to meetings and sign in and out. Commercial told Contractor how many employees it needed, and for how many hours. In the end, the Fourth Circuit concluded that they were joint employers. Commercial even gave employees clothing with its logo and told them to say they worked for Commercial. (In addition, the Court concluded that these were employees, not independent contractors, probably not surprising with this degree of direction and control.) So they would have been liable for overtime created between the two companies.

Tests for Joint Employment

In evaluating joint employment, courts consider hiring, firing, wages, and work schedules. The tests for joint employment are as evanescent as some of the employment relationships. The Department of Labor and National Labor Relations Board under the first Trump administration in 2020 issued rules requiring "direct and immediate control" or "actual and direct control." This was intended to allow more flexibility, but in 2023, the Biden NLRB canceled most of this and went with a standard requiring "actual or direct control." But then this standard got canceled by a federal court, which left everything in limbo.

The current Trump administration should swing the pendulum the other way. For one thing, proposed legislation (the Save Local Business Act of 2025) would require "direct, actual, and immediate control" over aspects of employment. Having a statute in place would reduce volatility, but it may not pass.

Current litigation includes a case filed by the NLRB that says that Amazon is a joint employer of delivery drivers employed by third–party contractors. The implication is that Amazon would then have to negotiate with their union. The NLRB says that Amazon controls the drivers of the contractor and should be considered their employer.

There is also a 2025 NLRB case against Google, alleging that Google is a joint employer of about 50 content creators employed by an IT firm. They voted to join a union, and being a joint employer would force Google to bargain directly with the union. This is like a 2024 case where the court ordered Google to bargain with a group of workers employed by a different staffing firm—but Google is appealing that decision. Google argues that it does not exert enough control over contract workers to be their joint employer.

Agreements in Joint Employer Scenarios

Some of the joint employer issues can be resolved with paperwork. Documents can matter a lot. If the organization is in a situation where joint employment is a possibility, it's wise to have good agreements in place.

For instance, if the organization works with a Professional Employer Organization (PEO) or temporary staffing agency, it's important to define how payroll runs, who administers benefits, and who calls the shots on day–to–day operations. If workers come on through a temp agency, the agreement should spell out who hires, who supervises, who pays, and who decides when coffee breaks happen. It's not a bad idea to figure out who can prevent overtime. When working with independent contractors or subcontractors, use clear written contracts that lay out supervision, tools, and reporting requirements.

Best Practices to Avoid Joint Employment Problems

Sometimes there will be joint employment and sometimes not. Remember, the "worst" joint employment can do is make both organizations responsible. But organizations can still contract between themselves to make sure responsibilities are handled. Here are some further tips.

• Use contracts that spell out exactly who is responsible for all relevant functions—hiring, firing, supervision, payroll, training, etc. 
• Keep payroll clean, where each employer is handling its own payroll and tax responsibilities.
• Keep the lines distinct between the organizations, so that each organization is handling its own supervision, direction, and discipline. Sharing tools and joint meetings push toward joint employment.
• Make sure your insurance will cover everyone that could be under your wing.
• Maintain control over your own employees and don't delegate authority to another company.
• Stick with short–term, project–based arrangements—at least if you are trying to avoid being a joint employer.
• If a situation starts feeling muddier than a toddler's rain boots, revisit the situation.

What About Workplace Safety?

If there is any possibility that there is a joint employer relationship, the organizations involved should make sure that workplace safety and health are being addressed. (And honestly, there's never a downside to keeping the workplace place.) OSHA takes the position that all organizations involved—such as a staffing agency, host employer, or contractors—share a duty to keep workers safe. Temporary workers are also entitled to protections under OSHA, so training, communications, and access to safety equipment must be provided.

In multi–employer environments (such as a large construction site that may have employees, temp workers, contractors, and subcontractors), each employer may have responsibilities, such as:

• Identify and address workplace hazards related to their operations;
• Clearly communicate safety expectations; and
• Ensure that all workers on the site understand emergency procedures and have access to personal protective equipment.

When are Religious Organizations Joint Employers?

How does this apply for religious organizations? First, of course, analyze whether joint employment would be in place under the current standards. As we've discussed in more detail elsewhere, work overseas is usually not subject to FLSA, and many religious organization employees are exempt either under standard factors or the ministerial exception. But if FLSA or other statutes apply, seconding and sharing relationships could mean that there is joint employment.

For instance, if mission groups are seconding missionaries, they may both have power to control and supervise the missionary. If the seconding arrangement is rather distant, of course they may not.

Both groups likely have the power to fire the worker or modify the conditions of employment. It could even be that one organization primarily controls overseas, while another controls when the worker is in the U.S. There may or may not be a close and longstanding relationship between the two mission groups. 

Or consider a church and a church plant—there could be power exerted by both churches, plus a longstanding relationship. And one organization might exert some control over the other in a denominational setting, as between a parish and diocese, for instance.

Two religious organizations could jointly control the workplace, as with a joint project or some kind of cooperative venture.

Conclusion

Whether for a religious organization or a business, it is wise to evaluate the possibility of joint employment and create good agreements. But in addition to evaluating joint employment status, evaluate whether the statutes themselves are likely to be violated. If there is no FLSA or OSHA problem, then it may not matter.

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¹Salinas v. Commercial Interiors, Inc., No. 15-1915 (4th Circuit, Jan. 25, 2017), found at http://www.ca4.uscourts.gov/Opinions/Published/151915.P.pdf.