The U.S. Department of Labor recently proposed a rule that would create a uniform standard for determining joint employer status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. The proposed rule has significant implications for employers who share workers or rely on contractors, because a joint-employment finding may expand liability to multiple employers for wage-and-hour violations, leave obligations, and other statutory compliance issues. The agency has said the proposed rule is intended to “reduce compliance and litigation costs, improve the Department’s ability to enforce the law, and help workers to better understand their rights and available remedies” while also promoting “greater uniformity in the analysis applied by courts.”
The proposed rule addresses two types of relationships. A “vertical” joint-employment relationship exists where a worker is jointly employed by two or more employers that simultaneously benefit from the same work, while a “horizontal” joint-employment relationship exists where a worker works separate hours for two or more employers “that are sufficiently associated with each other with respect to the employment” of the worker.
For determining vertical joint employment, the proposed rule focuses on whether the potential joint employer: (1) can hire or fire the employee; (2) substantially supervises or controls work schedules or conditions of employment; (3)...
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