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By: Will Collins
On April 1, 2019, the U.S. Department of Labor (“DOL”) announced notice of proposed rulemaking, amending the DOL regulations addressing joint employers under the federal wage and hour law (i.e. the Fair Labor Standards Act (“FLSA”)) and providing guidance and clarification long sought by employers.
The proposed changes announced last week mark the first revision to the DOL’s joint employment regulations since originally promulgated in 1958.
The proposed changes, which seek to address the situation where an employee works for his or her employer and that work simultaneously benefits another person or entity, offer a Four-Part Test to determine if an organization is a joint-employer by assessing whether that organization:
The DOL’s proposed changes also makes clear that only actual actions taken, “rather than the theoretical ability to do so under a contract, are relevant to joint employer status.”
The proposed changes also clarify that certain business models (such as franchises), practices, and agreements do not make joint employment more likely.
Under the proposed changes, examples activities not indicative of joint employment include:
And examples of agreements that do not indicate joint employment include contractual provisions requiring an employer to maintain:
The proposed changes would provide welcome clarity for employers and, through its articulation of a Four-Part Test, examples of business models, practices, and agreements that do not indicate joint employment, and the list of illustrative hypotheticals addressing specific joint employment scenarios, the proposed changes would provide needed guidance and certainty to joint employment in the FLSA context.
Now subject to a 60-day public comment period, we will continue to monitor the DOL’s proposed changes to the joint employment regulations.
If you have any questions or would like more information, please contact Will Collins at [email protected].