May 13, 2019

Department of Labor Announces Proposed Rule on Joint Employer

The US Department of Labor announced a proposed rule to revise and clarify the responsibilities of employers and joint employers to employees in joint employer arrangements. The Department has not meaningfully revised its joint employer regulation since 1958.

The Fair Labor Standards Act allows joint employer situations where an employer and a joint employer are jointly responsible for the employee’s wages. This proposal would ensure that employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek.

The Department proposes a four-factor test—based on established precedent—that would 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; and
  • maintain the employee’s employment records.

The proposal also includes a set of examples for comment that should further help to clarify joint employer status. Click here for those examples on a DOL Fact Sheet.

Because this has been an onerous issue for many restaurant operators in the past (particularly as it impacted franchisor/franchisees), we encourage you to file comments with the DOL.

Comments can be registered or made at www.regulations.gov

  • Enter the regulatory identifier number 1235-AA26 in the search field. This is the number assigned to the proposed overtime exemption regulation.
  • Click on Comments and enter your comment and required data. A receipt is then sent to the person making the comment.
  • Comments are due no later than June 10, 2019 at 11:59 PM ET

Click here for an article on this topic from Nation’s Restaurant News