Manufacturing companies sometimes struggle to find enough entry level workers, turning to temporary employees to bridge the gaps. However, the August National Labor Relations Board (NLRB) ruling and the January U.S. Department of Labor, Wage and Hour Division’s guidance on joint employers have given many pause in this practice. This article will focus on the NLRB’s analysis, but employers should apply the same reasoning for the Department of Labor’s interpretation of the Fair Labor Standards Act (FLSA) on joint employer compliance.
The NLRB announced changes to the “joint employer” status, categorizing many companies as joint employers for temporary workers along with their staffing agencies.
Now, two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or co-determine those matters governing the essential terms and conditions of employment.
This change affects manufacturers in a number of ways including, most notable, increased responsibility for temporary employee rights and the labor practices of the contracting agency. This means action (or inaction) on the part of a staffing agency could fall on the employer’s shoulders. Similarly, temporary workers are given the right to unionize and bargain with employers alongside consulting agencies, with the two seen as one joint employer.
Steps for Compliance
In order to stay compliant under this new joint employer definition, manufacturing companies can take the following steps:
- Employ due diligence in selecting a staffing partner, ensuring proper labor regulations and practices are in place prior to the beginning of your relationship
- Reevaluate temporary employee contracts, including strong indemnification provisions
- Avoid managing high-risk areas
- Employ a contracted third party to cover legally mandated components such as required trainings
- Focus on support over control in guiding employee performance
- Communicate employee rights effectively and often
Reevaluating Current Practices – OH!Manufacturing Can Help
Some companies may determine it’s best to hire on temporary employees full time and eliminate using contractors. This decision hinges on whether the convenience of outsourcing staffing is worth the potential risk of being blamed for an outside agency’s actions. Companies who rely heavily on temporary workers may want to consider other options. Should a company find an agency they can trust, the risk is minimized.
OH!Manufacturing can help in this difficult decision. Our experienced consultants can provide guidance on the best path for each individual manufacturing company. Contact us today!