The U.S. Department of Labor has issued a proposed rule to clarify when multiple businesses may be considered joint employers under federal wage and hour laws, aiming to create a more consistent national standard.
The proposed rule would establish a single test 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 DOL said the rule is intended to address inconsistent interpretations across federal courts by aligning the analysis under these statutes and providing clearer regulatory guidance.
The goal is to ensure that employers and employees have a consistent understanding of when more than one entity may be responsible for wages and working conditions.
The proposed rule also reflects the latest shift in a long-running debate over joint-employer liability, which has varied across administrations and federal courts. The DOL’s approach is generally viewed as narrowing the circumstances in which businesses may be held responsible for another entity’s workers, particularly in franchising and contracting arrangements.
Liability implications
Under the proposed rule, when a joint employment relationship exists, multiple employers may be jointly and severally liable for compliance with wage and hour obligations.
That includes responsibility for all hours worked, minimum wage, overtime pay, and other required compensation.
The DOL emphasized that clearer...
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