Gig Workers and FMLA: What You Should Know

Close-up image of a woman

By David Setzkorn

You’ve probably seen the recent news reports that say the gig economy is becoming a bigger part of the economic landscape. But that doesn’t mean employers have to get lost in non-compliance territory.

How can you stay on the path to compliance? Start by knowing your obligations under FMLA.

Understanding the Joint Employer Relationship

Workers hired as contract employees often deal with two employers who both have some influence over their working conditions. The Department of Labor or a court may consider these employers as part of a joint employment relationship. The Department of Labor regulation, 29 CFR §825.106 - Joint employer coverage calls out factors to consider when deciding if joint employer coverage exists:

“Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers, and facilities. 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...”

Under 29 CFR §825.106 (d), Each employer needs to count any employees considered employed by them. All employees must be counted by both employers to determine each employer’s coverage and employee eligibility. Under this rule, all facts and circumstances are important in deciding if a joint employer arrangement exists.

What about gig workers who are self-employed or who don’t work for a large company?

Don’t be tempted to think that they don’t qualify for FMLA because their employer has less than 50 employees. Here’s a small-company example of a joint employer arrangement for the gig workers involved:

  • An employer has 38 employees, but employs 12 gig workers as part of its employment strategy
  • The employer must count those 12 employees in determining if it has to provide FMLA, as well as employee eligibility requirements
  • It doesn’t matter which company lists these 12 employees on its payroll

What are the rules for gig employees who work for a larger, FMLA-eligible company?

Both companies in the joint employment relationship have responsibilities.

  • The primary employer (the company that issues to the payroll check to the worker) must:
    • Give all the required notices about FMLA
    • Maintain the gig worker’s health benefits
    • Handle job restoration
  • The secondary, or joint, employer may:
    • Have certain obligations to accept a worker back after FMLA leave, instead of using a replacement worker.

What if the secondary employer is not subject to FMLA, but employs gig workers from an employer that is?

The secondary employer still must follow the prohibited acts provision 29 CFR §825.220(a). This means the secondary employer cannot interfere with an employee’s right to take FMLA from the primary employer. That includes firing or discriminating against the primary employer or employee.

How to Keep on the Straight and Narrow

As the gig economy grows, employers should stay on top of FMLA Joint Employer regulations. One or both employers may have to provide benefits to employees under FMLA.

Remember: Knowledge is one key to staying on the road to FMLA compliance. Once you know the rules, you can map your course.

 

About guest blogger David Setzkorn

David Setzkorn, national practice leader – absence management, has led the strategic development of The Standard’s absence management offering since 2015. His experience includes consultation and development of absence management programs with large clients from implementation and training, to ongoing compliance with state and federal regulations. David is a graduate of Arizona State University with a Bachelor of Science in purchasing and logistics management, and an MBA with an emphasis in project management. He also holds a Chartered Property Casualty Underwriter (CPCU) designation along with multiple certifications in IT and Operational Management.