The Department of Labor’s (DOL’s) Wage and Hour Division (WHD) has issued a formal proposal to revise its regulations setting forth how joint employer status should be determined under the Fair Labor Standards Act (FLSA). The proposal seeks to rein in the since-rescinded expansive joint employer test that was adopted by the prior administration, and would create a more balanced approach to determining joint employment that should be easier to apply in practice.

Of particular note is the proposal’s treatment of what is sometimes referred to as “vertical joint employment,” the fairly common arrangement where an employee works for an employer but another business may benefit from the employee’s work. In setting forth the factors relevant and not relevant to a determination of joint employer status, DOL has proposed relatively clear standards that will make it less likely joint employment status will be found merely because two companies have a business relationship that may address employment matters, such as through a code of conduct or a franchise arrangement.

The proposal, which will be formally published in the Federal Register in the near future, is available here. Once it is formally published, interested parties will have 60 days to submit written comments.

Members of the Center for Workplace Compliance (CWC) can read more here.