Government, Human Resources, and Law

Joint liability found in H2A grower/contractor relationship

When there are problems, DOL frequently goes after both parties.

June 26, 2015
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While working with an H2A labor contractor to obtain foreign migrant workers can be beneficial for growers in terms of easing costs and liability, it doesn’t waylay all risks for the grower, particularly if the labor contractor isn’t following all of the rules and regulations outlined by the U.S. Department of Labor.

Increasingly, the DOL is finding growers and contractors jointly liable for workers when there is a violation.

“DOL, in their enforcement of the laws and regulations, is worker focused,” said Kimberly Clarke, Varnum attorney. “Every reasonable interpretation is interpreted in favor of the employee, and joint employment is just one of those.”

Clarke said there is significant risk to growers if they are held jointly responsible with an H2A contractor, and the H2A contractor is not meeting its obligations under the H2A contract.

Current law does not clearly delineate between a worker having one employer or multiple employers, making the waters somewhat murky for growers who seek to contract with an H2A labor contractor.

“It gets into a highly factual analysis,” said Jackie Appleman, attorney with Rhoades McKee.

Appleman said Michigan uses a four-factor test, known as the Economic Realities test, and the totality of the circumstances to determine joint employment.

“The four factors are: who controls the workers’ duties; payment of wages; the right to hire, fire and discipline; and the performance of duties toward the accomplishment of a common goal,” Appleman said.

“They’re going to look at those four factors and the totality of the circumstances overall, and they are going to try to determine if the grower is also an employer of the nonimmigrant worker. If so, the employer is also liable for any violations.”

Appleman said the best way for growers to mitigate the risk of being held jointly responsible is to work with a trusted H2A labor contractor and be aware of the four factors.

“Control is a big issue when you are determining if someone is a joint employer,” she said. “You want to make sure you are not the direct supervisor of the workers, not the one paying them, that you have no right to hire, fire or discipline them. There is no guarantee, though.”

Appleman added, “The more you try to control what they are doing, the more likely you are to be held as a joint employer. So if you try to really supervise that there are no violations, you are more likely to be held as a joint employer.”

Clarke reiterated that trusting the H2A contractor is paramount.

“I think what they need to do is be aware of the potential liability and do their due diligence with the potential farm labor contractor to make sure they feel comfortable with the compliance standards of the farm labor contractor,” she said.

She noted there is constant litigation and developments occurring right now in this area.

“I try to make sure my clients have a full understanding of all the potential implications so they can structure their business dealings in a way that would protect them and incorporate those potential risks,” she said.

So far, H2A labor contractors have not been utilized as much in Michigan as they have in Florida and California, but the growing shortage of agriculture workers increases the likelihood that Michigan growers will begin considering these arrangements more seriously in the coming years.

Agriculture is not the only industry where joint liability is an issue: Temp agencies and other industries that utilize a third-party employer are also at risk of being seen as a joint employer and being held liable for worker violations by the DOL, Clarke said.

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