A proposed joint employer rule from the U.S. Department of Labor would clarify the standard for joint employer liability under federal wage and hour laws. The proposal would apply to the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act.
The proposal resembles an interpretation that DOL adopted in 2020 but rescinded during the Biden Administration.
Under the proposed rule’s four-factor test, there is a substantial likelihood of joint employment if the potential joint employer satisfies all four of these factors: (1) it hires or fires the employee; (2) it substantially controls the employee’s work schedule or employment conditions; (3) it determines the employee’s payment rate and method; and (4) it maintains the employee’s employment records.
Some common business practices, such as operating as a franchisor, would not automatically confer joint employment status under the proposal.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here. Employers seeking a review of wage and hour regulations may enroll in CWC’s Fundamentals of Wage and Hour Compliance course.