Proposed Rule Could Expand Liability for Construction Industry Employers

Shared control could mean shared liability for employers in the construction industry. A newly proposed US Department of Labor rule aims to clarify but also expand the definition of what constitutes a joint employer that triggers joint and several liability for wage and hour claims under the Fair Labor Standards Act. The layered business model common to the construction industry—with owners, general contractors, subcontractors, and staffing firms sometimes intertwined in the employment relationship—creates greater potential liability exposure under the new rule. Christopher Drewry and Kaylin Cook say construction professionals should view any form of shared control of an employee as a potential source of liability. Under the proposal, contractual rights and the ability to control workers may factor into joint employer determinations, even if those contractual rights are never used. Chris and Kaylin recommend employers review their agreements, day-to-day operations, and internal processes to look for potential joint employer liability.