The U.S. Department of Labor Issues Guidance on Joint Employer Rule

The U.S. Department of Labor issued some much-needed guidance regarding the application of the federal Fair Labor Standards Act’s Joint Employer rule. The rule becomes effective on March 16, 2020. In the joint employer scenario where another person is benefitting from the employee's work, the Department is adopting a four-factor balancing test derived from Bonnette v. California Health & Welfare Agency  to assess whether the other person: (1) hires or fires the employee; (2) supervises and controls the employee's work schedule or conditions of employment to a substantial degree; (3) determines the employee's rate and method of payment; and (4) maintains the employee's employment records. No single factor is dispositive in determining joint employer status, and the appropriate weight to give each factor will vary depending on the circumstances. The putative employer must exercise actual control over these factors and the satisfaction of the maintenance of employment records factor alone does not demonstrate joint employer status. 

The DOL indicated in its announcement regarding the new rule that the aim of the rule is to bring certainty to determinations as to what business practices qualify as joint employment and promote uniform decision-making among the courts.

If you have questions about whether your business is engaged in joint employment and what that might mean in terms of potential liability, contact the BrownWinick Employment attorney with whom you work.