Best Ohio Wage & Overtime Lawyer Reply: Am I an employee of a parent company if I work for a subsidiary? Who is my employer if I work for a staffing company? Can I sue more than one employer at the same time for wage theft?
In our wage and hour attorneys‘ previous overtime blog posts, our wage lawyers have discussed joint employment for those who work for staffing agencies. (See Staffing Agencies and Employers Share Liability Under Employment Discrimination Laws, Who is My Employer, The Staffing Agency or The Job That I Was Placed At?). But, what about those people who work for subsidiary companies? Are they considered to be working for the parent company, the subsidiary, or both? Recently, the United States District Court for the Northern District of Illinois, Eastern Division, touched on this subject in Brown v. ABM Industries, Inc.
Brown, an employee of ABM Industries, sued both ABM Industries, and its subsidiaries who provide janitorial services for large office buildings in Chicago. Brown claimed that janitors used handwritten sheets, and that the employer required janitors to record only their scheduled hours, instead of all the hours worked. The employer required the janitors to collect and prepare cleaning supplies before their shift started, but did not pay for the pre-shift work. ABM Industries filed a motion to dismiss the overtime wage lawsuit, claiming that Brown had failed to allege that the ABM Industries and its subsidiary were joint employers.
The court explained that, for the purpose of the Fair Labor Standards Act (“FLSA“), two or more employers may jointly employ someone. Under the Department of Labor‘s (“DOL“) regulation, whether two or more entities are joint employers under the FLSA depends on the “economic reality” of the parties’ relationship:
Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:
(1) Where there is an arrangement between the employers to share the employee’s services, as for example, to interchange employees; or
(2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or
(3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.
The court looked at the totality of the circumstances to determine whether the employee had plausibly alleged that ABM Industries was acting directly or indirectly in the interest of the other ABM entities. Specifically, the court considered the following allegations: The subsidiary’s wage and hour policies were established by ABM Industries and implemented by its wholly-owned subsidiaries. ABM Industries provided company-wide wage and hour instructions and training to the subsidiaries, and ABM Industries’ in-house counsel advises all the subsidiaries to implement or change wage and hour policies and practice. And, ABM Industries trains its supervisors to instruct janitors to arrive early to collect supplies and equipment before their paid shift begins. “Further, Plaintiff articulates that after she complained to her supervisor about not being paid for all of the hours she worked, her supervisor told her that nothing could be done about it because the decision not to pay for pre-shift work came from ABM management.”
Based on those facts, the court found that the ABM Industries and the subsidiary were joint employers under the FLSA. This means that both companies could be liable to the employee for the FLSA violations:
Viewing the totality of “the circumstances of the whole activity,” see Karr, 787 F.2d at 1208, Plaintiff has plausibly alleged that ABM Industries is acting directly or indirectly in the interest of the other ABM entities as outlined under 29 C.F.R. § 791.2(b)(2). See Iqbal, 556 U.S. at 678 (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”). … According to Plaintiff, ABM Industries, directly or indirectly with the other named Defendants, established a policy that forbids payment of overtime to janitors unless it is pre-approved. (Id. ¶ 161.) Under these facts, Plaintiff has sufficiently alleged that Defendants collectively constitute a joint employer for purposes of the FLSA.
The moral of this wage and hour case is that it may not be perfectly clear who your employer is. That is why it is best to contact experienced wage law lawyers to help you sort out what your wage theft claims may be and which employers to sue.
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm, Brian Spitz, or any individual attorney.