A recent decision from the U.S. Court of Appeals for the 2nd Circuit should cause hospitals and other facilities to monitor carefully the hours of workers provided by staffing agencies. A nursing aide (Aide) signed on with three different temporary staffing agencies for work at various facilities. All three agencies gave the Aide numerous temporary assignments at Bellevue Hospital (Bellevue) in New York City. While the Aide never worked more than 40 hours per week for any one agency, the Aide did, on occasion, work more than 40 hours per week at Bellevue. Finding Bellevue was a "joint employer" along with the staffing agencies that directly employed and paid the Aide, the court held that Bellevue must pay overtime to the Aide, in compliance with the Fair Labor Standards Act (FLSA).

As defined in the FLSA, "employer" is "any person … acting directly or indirectly in the interest of any employer in relation to an employee." "Employee" is "any individual employed by an employer." The court used an "economic reality" test to determine whether a worker is an employee under the broad definition of the FLSA. Examining six factors, including the facts that (1) the Aide worked on Bellevue's premises; (2) the referral agencies assigned workers to the same facility whenever possible for continuity of care; (3) the Aide performed work which was integral to Bellevue's operations; (4) the Aide's work responsibilities at Bellevue were the same regardless of which agency referred the Aide; (5) Bellevue effectively controlled the on-site terms and conditions of the Aide's employment; and (6) through the various agencies, the Aide worked exclusively for Bellevue, the court held that the economic reality was that Bellevue exerted enough control over the agency-referred workers to be treated as a joint employer. Accordingly, Bellevue was responsible for the Aide's overtime pay. Additionally, having made no effort to insure that its employment of temporary workers complied with the FLSA, Bellevue was ordered to pay liquidated damages and a portion of the Aide's attorney's fees as well.