Although the federal Fair Labor Standards Act (FLSA) provides legal protection and ensures certain rights to hourly, non-exempt workers throughout America, the laws are not so clear when it comes to outsourcing.
As companies continue to downsize their workforce, the work that needs to be done either needs to be covered by the employees who remain on the payroll or outsourced. But when contractors develop close business relationships with their subcontractors, the line between contractor and employer can get blurry.
In a recent collective action against Commercial Interiors Inc. and J.I. General Contractors, the Fourth Circuit Court wrote its own plan for determining when a contractor bears responsibility for the employees of its subcontractor.
The collective action wage and hour lawsuit was filed by a group of employees who installed drywall for J.I. and Commercial. They were legally considered employees of J.I. because J.I. was the one that signed and distributed their paychecks, but they did a lot of work for Commercial. Continue reading