Monday, January 13, 2020

New FLSA joint employer final rule from DOL

The Department of Labor (DOL) published its final rule regarding joint employer status under the Fair Labor Standards Act (FLSA) (press release | actual final rule). I suppose the headliner is the 4-factor test for analyzing whether a putative joint employer is actually deemed a joint employer.
Not official use.
[T]he 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 remainder of the rule is worth perusing for some additional helpful tidbits, including:
  • A joint employer must actually exercise (directly or indirectly) one of the "four control factors" - the ability, power, or reserved right is not enough;
  • "[W]hether the employee is economically dependent on the potential joint employer is not relevant for determining the potential joint employer’s liability under the Act";
  • "The Department’s proposal identified certain business models (such as a franchise model), certain business practices (such as allowing the operation of a store on one’s premises), and certain contractual agreements (such as requiring a party in a contract to institute sexual harassment policies) as not making joint employer status more or less likely under the Act."
The final rule becomes effective on March 16, 2020. 

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