DOL’s updated joint employer rule nearing publication

In a move mirroring its actions regarding overtime and independent contractors, the Department of Labor (DOL) is actively planning to create a single, nationwide standard for classifying joint employers. Both employers and employees have been waiting for this regulation because it will determine when two or more employers can be jointly liable for workplace offenses under federal laws that protect wages, unpaid leave, and migrant and seasonal farm employees. In addition, joint employees can petition either employer for union recognition and, if successful, bargain with either party. The joint employment issue has drawn enormous attention as the franchise model, once largely a feature of the fast-food industry, has become a widespread way of doing business. In such a model, the issue of joint employment is particularly prominent. 

The new proposal is designed to return to a standard similar to the one in place during Trump 1.0 but which was rescinded by the Biden administration. The Trump rule required a business to exert “actual” control over another company’s workers to be to be considered a joint employer. The Biden rule was far more expansive, finding joint employment occurs in arrangements where one employer had contractual or contingent rights to affect the workplace, even if unexercised. The new rule would apply to enforcement under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act.