Joint employer

Definition

When two businesses share legal responsibility for the same worker.

Why It Matters

A staffing agency's people, a franchisor's brand standards and a subcontracted crew can each put a second name on the same employee, and the second name is usually the one with money in it. What that buys is unpaid overtime, discrimination claims and bargaining obligations for people who never appeared on the payroll you priced. The governing test moves with the agency and the administration, so the durable thing to look at is the arrangement: how many workers arrive through somebody else, who sets their hours and their pay, and whether the contract shifts the liability back or merely says it does.

In numbers: A shop running 20% of its labor through an agency can find that same 20% counted as its own for wage and hour purposes, and the back pay follows the business.