In an issue of first impression, the Missouri Supreme Court has held that if two companies are found to be “joint employers” under the Missouri Minimum Wage Act (MMWA) each would be individually responsible for paying a minimum wage. This is true even if one company engages in an unforeseen criminal act, such as making an illegal wage deduction. The other company still has its own independent legal duty as a joint employer to ensure compliance with the Missouri Minimum Wage Law Act.

Factual Setting: Staffing Agency Provides Housekeepers to Hotel

A hotel management company contracted with a staffing agency to provide housekeepers on an as-needed basis. Subsequently, federal law enforcement officials charged the staffing agency with crimes, and ultimately, its owners were convicted of labor racketeering based in part on their withholding earned wages for visa fees.

Then a former housekeeper sued the hotel and management company in a class action pursuant to the MMWA for failure to pay minimum wage and overtime compensation.

Legal Question: Who Is a Joint Employer?

These defendants asserted that the criminal acts of the staffing agency absolved them from joint employer liability.

First, the Missouri Supreme Court identified five factors used to determine whether two separate companies are joint employers as a matter of law. They are: (1) who has the power to hire and fire the worker; (2) who supervises and controls the worker’s work schedule and conditions of work; (3) who determines the rate and method of payment of the worker; (4) who maintains work records; and (5) whether the alleged employers’ premises and equipment were used for the plaintiff’s work.

Here, the Court said there were genuine fact issues of whether the hotel, management company and staff agency were joint employers, and that ultimate finding would have to be determined by a jury.

Nevertheless, the Missouri court ruled that if the hotel and management company were found to be a joint employer of the housekeeper, they will be individually responsible for paying a minimum wage or overtime compensation.