Liability for Back Wages Extends to Joint Employers

September 24, 2020 | From HRCalifornia Extra

by Michelle Galbraith, J.D.; HR Adviser, CalChamber

In the mid-1800s, a new form of industry arose that allowed corporations to minimize labor expenses while also limiting their exposure to liability for unsafe workplaces: the sweatshop. Corporations would hire a middleman — a “sweater” — to supervise workers who labored in poor conditions for very low wages.

“By contracting with a ‘sweater’ to employ the workers, corporations were able to distance their brands from the unseemly conditions,” said Erika Frank, vice president of legal affairs and general counsel for CalChamber, “and of course protect their bank accounts from liability for the illegal labor practices that supported their operations.” 

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