Tag Archives: Joint Employer

DOL Plans to Rescind Trump-Era Rules on Independent Contractor and Joint Employment Status

The Department of Labor (“DOL”) has announced a plan to roll back the Trump administration’s rules for determining independent contractor and joint employment status. These rules were heavily criticized by pro-employee organizations for not affording adequate protections to workers and being too favorable to employers.

Independent Contractors

The proposed rule laid out a five-factor “economic reality” test to determine if an individual should be classified as an independent contractor or an employee: (1) the nature of the work and the degree of control the hiring entity has over the work performed; (2) the worker’s opportunity for profit or loss based on their own initiative and investment; (3) the skill required to perform the work; (4) the permanency of the working relationship between the worker and the hiring entity; and (5) whether the work being performed is integral to production.

In its notice to rescind this rule, the DOL stated that this test has not been supported by prior court decisions or used by the DOL, that it misconstrued the law, and that it disproportionately benefited employers.

Joint Employment 

The DOL also announced its intention to rescind the final rule outlining the test for joint-employer status though this rule, from its inception, had faced strong opposition from states’ attorneys general.  The rule established a four-factor balancing test to determine if Company #2 could be considered a joint employer of Company #1’s employee: does Company #2 (1) hire or fire Company #1’s employees, (2) supervise and control work schedules or conditions of employment of Company #1’s employees, (3) determine the rates and methods of payment of Company #1’s employees, and (4) maintain the employment records for Company #1’s employees?

The DOL wanted further analysis as the proposed rule differs “from the analyses and tests applied by every court to have considered joint employer questions.”

The DOL has invited public comment on the withdrawal of these rules but has yet to announce any proposed new rules. Suffice it to say the Biden administration will be more employee-friendly in any upcoming labor and employment-related lawmaking. 

For any questions about the above changes, please contact Ellen below:

Ellen M. Leibovitch

Board Certified Labor & Employment Lawyer

ASSOULINE & BERLOWE, P.A.

2101 N.W. Corporate Blvd., Suite 410

Boca Raton, Florida 33431

Main: 561-361-6566
Direct: 561-948-2479

[Bio] [V-card] [Directions]

eml@assoulineberlowe.com

www.assoulineberlowe.com

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U.S. Department of Labor Issues Final Rule To Update FLSA’s Joint Employer Regulations

In addition to all the other labor and employment updates in the law of the last week, the issue of “joint employment” has gone through an official transformation this past week. 

The issue of Joint Employer arises frequently in Fair Labor Standards Act (FLSA) cases when employees seek to hold more than one “employer” liable for overtime and other wages claimed to be owed.  Oftentimes, the question of whether entities can be considered joint employers is uncertain and differs from court to court.  In an effort to clarify the matter, the Department of Labor (DOL) has adopted a four-factor balancing test to determine joint employer status that is focused on decision-making (did the alleged employer have the right to hire and fire the employee?), supervision (did the alleged employer substantially control the conditions of employee’s employment?), payment (did the alleged employer set the employee’s pay?) and record-keeping (did the alleged employer maintain employment records?).

As with all balancing tests, no one factor is more important than the other.  The questions becomes whether, on balance, the employee performed work that benefitted more than one employer, and additional facts relevant to this inquiry may also be considered.

This final rule quietly went into effect on March 16, 2020 but was understandably overshadowed by critical issues surrounding COVID-19. 

Important to note that this rule is only applicable to joint employer issues arising under the FLSA and not to other federal laws impacting employment such as Title VII of the Civil Rights Act.

More information about the new rule can be found at https://www.dol.gov/agencies/whd/flsa/2020-joint-employment.

Of course, feel free to contact me if you have any questions.

Ellen M. Leibovitch

Board Certified Labor & Employment Lawyer

ASSOULINE & BERLOWE, P.A.

2300 Glades Road

East Tower – Suite 135

Boca Raton, Florida 33431

Main: 561-361-6566
Direct: 561-948-2479

[Bio] [V-card] [Directions]

eml@assoulineberlowe.com

www.assoulineberlowe.com


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