Joint Employment and Staffing Firms In some situations, an individual may be an employee of more than one employer at the same time (“joint employment”). A common example is when a business obtains workers through a temporary staffing or leasing agency. In joint employment situations: • Both the staffing firm and the client business may be jointly responsible to ensure that the worker is paid in accordance with the federal Fair Labor Standards Act (FLSA). • The Equal Employment Opportunity Commission (EEOC) has explained that either the staffing firm or the client (or both) may be considered an employer under federal civil rights laws, including Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA). The EEOC refers to such workers as “contingent workers.” If either the staffing firm or the client has sufficient control over the contingent worker’s work, that entity will be an employer under these statutes. Even if an entity exercises relatively little day‑to‑day control, it may still be deemed an employer if it has enough employees to be covered by the law. STATUTORY EMPLOYEES Even if a worker is not an employee under common‑law tests, they may be treated as an employee for specific statutory programs. Examples include: • FICA (Social Security and Medicare) tax • Federal and state unemployment insurance tax • Workers’ compensation • Federal and state wage‑and‑hour laws (FLSA, Minnesota Fair Labor Standards Act) • Occupational safety and health requirements • Other federal or state employment statutes Some statutes also contain specific employee categories (for example, certain salespersons) and special rules for family‑owned businesses that employ relatives. Because both federal and state laws define who is an “employee” for their purposes, both must be considered before concluding that a particular legal requirement does not apply. The definition of “employee” is often a legal question, and borderline situations should be reviewed with counsel before deciding that an individual is not an employee. INDEPENDENT CONTRACTORS Many businesses engage independent contractors rather than employees to meet temporary or specialized needs. When properly structured, this arrangement can benefit both companies and workers. Companies may avoid certain employment‑tax and benefit costs and can pay by project rather than by time. Workers may gain scheduling flexibility and entrepreneurial opportunities.
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