MASS ADOPTS FLSA JOINT EMPLOYER TEST

The Massachusetts Supreme Court has decided that a company that entered into a subcontract for regional direct sales services for its clients could not be liable under Massachusetts wage laws as the “joint employer” of those who worked as salespersons for the subcontractor. The court that the Massachusetts law that sets the standard for classifying an individual as an employee or an independent contractor does not set the standard to determine whether someone is that individual’s joint employer for those laws.

Why This Is Important…The court used the test applied to determine joint employer status under the Fair Labor Standards Act As a result, whether an entity is a joint employer is determined by considering the totality of the circumstances of the relationship between the individual and the entity, guided by four factors: whether the entity (1) had the power to hire and fire the individual, (2) supervised and controlled the individual’s work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. This is a more complex and harder test to meet than that set under state law.