Joint Employment Rules Revision Proposed by DOL

Joint Employment Rules Revision Proposed by DOL

The U.S. Dept. of Labor announced a proposed rule on April 1, 2019 to revise the rules regarding joint employment under the Fair Labor Standards Act (FLSA). Joint employment is when two or more entities share responsibility (liability) for employees. The Notice points out that there has been no meaningful change in the regulation since 1958 and that the previous administration attempted change at a sub-regulatory level.


Department of Labor Announces Notice of Proposed Rulemaking: Joint Employer Status under the FLSA


The proposal proposes a four factor test to 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;
  • maintain the employee’s employment records.

It also includes a set of examples for guidance (see link above).

So what does this mean in the grand scheme of things in the world of labor?   Let’s look.

This may seem like a simple enough proposal to the casual reader but in fact this is another volley in the constant “war” between competing philosophies of “Business v. Labor.”

Reasonable, intelligent, even if dispassionate, people will see facts differently depending on how they view the world. The business community will see the changes as positive and the labor community will see them as problematic. It seems to me, the biggest immediate beneficiaries  would be on the ever emerging and expanding “gig economy” start-ups. It’s a crying shame though that the DOL didn’t see fit to include an example if such in its list of examples.

The key points in the proposed rule change are:

  • narrowing of definitions by requiring actual activities as opposed to having theoretical authority,
  • that merely having the authority to hire or fire, supervise the work, if that doesn’t really take place in the real world then that would not be used as a reason to claim joint employment,
  • that economic dependence not be used as a factor (as well as other disentanglement from language of the difference between employee and independent contract labor),
  • to remove the terminology “not completely disassociated” as part of a standard,
  • and more.

Frankly, I am constantly amazed by the creative, well reasoned, and constructive arguments made by people on both sides of the labor / business divide. Bearing that in mind, I’ve been around long enough to know that many thoughts and scenarios of potential effects on business and on workers of the proposed rule will be presented and argued over. This proposal may or may not be modified; may or may not be accepted or rejected in whole. A safe bet would be that in whatever form it is finally done, it will be litigated. From there it’s anyone’s guess. So be aware it’s out there and stand by or if this is something near and dear to your heart and business for goodness sakes you can follow the links from the one above to include your comments.

— Ken Frazer  /  Ken@eligibilitytrackingcalculators.com



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