are jointly responsible to ensure that the employee is paid in accordance with the federal Fair Labor Standards Act (FLSA), as described in the Labor Standards section of this chapter. Note also that the Equal Employment Opportunity Commission (EEOC) has issued guidance on the application of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Equal Pay Act (EPA) to individuals placed in job assignments by temporary employment agencies and other staffing firms (the EEOC refers to such individuals as “contingent workers”). In that Guidance, the EEOC states that either the staffing firm or the client (i.e. the business to which the contingent workers have been supplied), or both, may properly be considered an employer. If either or both has “control” over the contingent worker’s work, that party will be an employer under Title VII, the ADA, the ADEA, and the EPA. Also, even if either lacks such “control”, it will be considered an employer of that contingent worker, if it has enough other employees so as to be subject to those laws. STATUTORY EMPLOYEES Even if a worker is not an employee under common law rules, he or she may be considered an employee for certain statutory purposes, such as FICA (Social Security and Medicare) tax, federal and state unemployment insurance taxes, workers’ compensation, Fair Labor Standards Act compliance, occupational safety and health requirements, and other statutory programs. Likewise, a federal or state statute may exempt certain employers or employees from its application. Because both federal and state statutes define employees covered by their respective laws, both sources must be consulted before concluding a legal requirement is not applicable to a specific situation. Special rules apply to certain occupations, such as salespersons, and to special situations such as family owned businesses that employ family members. The definition of “employee” often involves a legal determination. For this reason, particularly in unclear cases, it is important to consult an attorney before concluding an individual is not an employee. INDEPENDENT CONTRACTORS Many companies engage independent contractors, rather than employees, to fill temporary and sometimes permanent staffing needs. Such an arrangement is often beneficial for both companies and workers. Companies avoid paying certain taxes applicable to employees and are able to pay their workers by the project, without overtime pay. Workers gain flexibility that might not be available as an employee. In determining whether a worker is an employee or an independent contractor, companies often use the IRS “right to control” standard. Different statutes apply varying tests to determine whether a worker is an employee or an independent contractor. While the IRS applies “right to control” test, many other statutes, such as FLSA, apply a more employee-favorable standard such as “economic dependence” or “economic realities” test. In other words, even if the worker is not controlled by the company a worker may still be an employee if they are in fact economically dependent on the work just like an employee. The U.S. Department of Labor (DOL) takes the position that “most workers are employees under the FSLA’s broad definitions,” and explains that under the FLSA’s very broad definition of employment, to employ means “to suffer or permit to work.” For wage and hour purposes, the DOL looks to six factors in determining the nature of a working relationship: (1) Is the work an integral part of the employer’s business? (If yes, employee status is indicated), (2) Does the
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