DOL sends FLSA joint-employer rule to White House

Dive Brief:

The U.S. Department of Labor (DOL) has sent a proposal for new regulations on joint employment under the Fair Labor Standards Act (FLSA) to the White House's Office of Management and Budget, according to an update posted last week.
The filing makes good on DOL's previously announced plan to "clarify the contours of the joint employment relationship to assist the regulated community in complying with the [FLSA]." The agency said it believes changes in the 21st century workplace are not reflected in its current regulatory framework.
Title 29 of FLSA contains the law's provisions regarding situations in which two employers jointly employ a worker — and are therefore jointly liable for FLSA violations. DOL issued guidance in the form of an Administrator's Interpretation on joint employment in 2016 during the Obama administration, but the agency rolled back that guidance in 2017.

Dive Insight:

Joint employment remains an area of risk for employers, especially those in industries in which franchising plays a big role, like fast food, as well as those that rely on staff from temporary agencies. It's an area of uncertainty and confusion, partially because of the many laws that contemplate joint employment. There's little clarity in other areas of the law, either; as DOL works to adopt one standard, the National Labor Relations Board is working to do the same under the National Labor Relations Act.

This compliance web has led some experts in the employment law community to call for action by Congress, including the introduction of legislation that would set one definition for both the NLRA and FLSA. A Democratic majority in the House of Representatives may prove a setback to that proposal, however.

It's unclear whether DOL's rules will look similar to NLRB's, which would make an employer a joint employer of another employer's employee only if the two employers share or codetermine the employee's essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.

But one thing's for sure: DOL's new rule is expected to establish a "high bar" for joint-employment under the FLSA, according to The Wall Street Journal. In a shift away from Obama-era policy, the rules are unlikely to create a standard under which business would frequently be deemed joint employers.