DOL issues final rule on joint employer status under FLSA

February 2020 employment law letter

Authors:

Saul C. Glazer, Axley Brynelson, LLP

The U.S. Department of Labor (DOL) recently announced the final rule concerning joint employment under the Fair Labor Standards Act (FLSA). The effective date is March 16, 2020.

Four-factor test

The FLSA established the 40-hour workweek, minimum wage, and minimum overtime pay guidelines. Joint employment can mean two employers are considered as one, and therefore overtime rules would combine the working hours for one employee from both employers. In the joint employer scenario, when another employer is benefiting from the employee's work, the DOL adopted a four-factor balancing test derived from Bonnette v. California Health & Welfare Agency to assess whether the other entity:

Hires or fires the employee;
Supervises and controls her work schedule or employment conditions to a substantial degree;
Determines her payment rate and method; and
Maintains her employment records.

No single factor is dispositive in determining joint employer status, and the appropriate weight to give each factor will vary depending on the circumstances. Satisfying the maintenance-of-employment-records factor alone, however, doesn't demonstrate joint employer status.

Employers will generally be sufficiently associated if:

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