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Wednesday, August 27, 2014

Joint Employer Status with Temporary Employment Agency Under Missouri’s Minimum Wage Law

In Tolentino v. Starwood Hotels & Resorts Worldwide, Inc., the Supreme Court of Missouri held that an employer that contracts to receive employees from a temporary employment agency (“temporary agency”) may be held liable as a joint employer with that temporary agency for the temporary agency’s violation of Missouri’s Minimum Wage law,  § 290.500 et. seq. R.S.Mo. (“MMWL”).

Starwood occasionally obtained housekeepers from Grant Labor Services (“GLS”), paying for their services on a per-room rate basis.  For one pay period, covering 122 rooms cleaned by Tolentino, after deductions by GLS, Tolentino’s take home pay was $0.  Tolentino sued Starwood and GLS for failure to pay minimum wage in violation of the MMWL.  The trial court granted Starwood’s motion for summary judgment on the grounds that Starwood adequately compensated Tolentino and could not be held liable for GLS’ unforeseeable, illegal wage deductions.

The Supreme Court reversed the trial court and remanded the case to determine whether Starwood and GLS were joint employers under the MMWL.  It held that factors to consider for that inquiry are Starwood’s power to hire and fire, right of supervision, control over rate and method of pay and maintenance of records.  More importantly, the Court held that if Starwood was a joint employer, then it could be held liable for GLS’ failure to pay the minimum wage, which resulted from an illegal deduction, because Starwood had an independent duty to pay the minimum wage.

The lesson of this case is that employers using temporary staffing agencies likely should determine whether they are joint employers with the temporary agency, and if so (or regardless to be conservative) verify that the temporary workers are paid in compliance with the MMWL.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and D. Leo Human.

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