On April 1, 2019, the U.S. 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 (FLSA) allows joint employer situations where an employer and a joint employer are jointly responsible for the employee’s wages. This proposal would ensure 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.
In 2017, the Department withdrew the previous administration’s sub-regulatory guidance regarding joint employer status. That guidance did not go through the rulemaking process that includes public notice and comment.
The Department proposes a clear, four-factor test—based on well-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 would further help to clarify joint employer status.
The Notice of Proposed Rulemaking (NPRM) was published on April 9, 2019 in the Federal Register. Interested parties may submit comments on the proposal at www.regulations.gov in the rulemaking docket RIN 1235-AA26.
On May 13, 2019 the Department announced that comment period originally set to end on June 10, 2019 has been extended until June 25, 2019. Only comments received during the comment period will be considered part of the rulemaking record.
The Department will consider all timely comments in developing any final rule.
- Notice of Proposed Rulemaking: Joint Employer Status under the FLSA
- Fact Sheet: Notice of Proposed Rulemaking to Update the Regulations Governing Joint Employer Status under the FLSA
- Frequently Asked Questions About the Proposed Rule
- Examples Clarifying Joint Employment Status
- Press Release [04/01/19]: Department of Labor Issues Proposal to Update the FLSA’s Joint Employer Regulations
- Press Release [04/08/19]: Comment Period for U.S. Department of Labor’s Joint Employer Proposal Opens