When someone performs parallel work for two different companies, are both companies responsible for complying with federal labor laws?
The answer can have serious implications in a variety of scenarios, including when an employee is owed overtime pay and whether an additional company is obligated to pay it. It also determines whether an additional company is responsible for any assessed penalties if they violate federal labor law by having a young employee perform dangerous labor.
That’s why the United States Department of Labor is taking steps to provide greater clarity. This week, we published a proposed rule — the Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act — designed to clear up confusion and demystify joint employment for both employers and employees.
Published in the U.S. Federal Register on April 22, our proposed rule seeks to eliminate confusion and uncertainty surrounding when joint employment applies and to clarify the scope of joint employment in the regulatory space. It also aims to improve labor law compliance by defining established roles for employers and employees. Furthermore, the proposal would simplify the department’s enforcement efforts, reduce burdensome litigation, and promote greater uniformity in court analyses.
Joint employment occurs when two or more employers share legal responsibility for the same employee and is especially common in...
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