DOL Proposes Revised Joint Employer Definition

The Department of Labor (DOL) today announced a proposed rule to revise and clarify the responsibilities of employers and joint employers to employees in joint employer arrangements. The department has not meaningfully revised its joint employer regulation since 1958.

whd-issues-opinion-on-fmla-leaveThe Fair Labor Standards Act (FLSA) allows joint employer situations where an employer and a joint employer are jointly responsible for the employee’s wages. This proposal would ensure employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek.

“This proposal will reduce uncertainty over joint employer status and clarify for workers who is responsible for their employment protections,” said Secretary of Labor Alexander Acosta. “Providing public notice and comment is the best way to move forward with another significant deregulatory proposal.”

In 2017, the department withdrew the previous administrations sub-regulatory guidance regarding joint employer status that did not go through the rulemaking process that includes public notice and comment.

The department proposes what it calls “a clear, four-factor test” — based on well-established precedent — that would consider whether the potential joint employer actually exercises the power to:

  • Hire or fire the employee;
    Supervise and control the employee’s work schedules or conditions of employment;
    Determine the employee’s rate and method of payment; and
    Maintain the employee’s employment records.

“The proposal explains the statutory basis for joint liability, helping to ensure that the Department’s joint employer guidance is fully consistent with the text of the FLSA,” said Keith Sonderling, acting administrator for the department’s Wage and Hour Division (WHD). “The proposed changes would provide courts with a clearer method for determining joint employer status, promote greater uniformity among court decisions, and reduce litigation.”


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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