U.S. Department of Labor Rescinds Joint Employer Rule

On July 29, 2021, the United States Department of Labor (“DOL”) announced that it will rescind, “The Joint Employer Final Rule” which defined “joint employer” under the Fair Labor Standards Act (FLSA).  The DOL formally published the “Rescission Final Rule” on July 30, 2021, and it becomes effective on September 28, 2021.

Prior Status of Joint Employer under The Joint Employer Final Rule

The DOL, under the Trump Administration published the “Joint Employer Final Rule” with it going into effect in January 2020.  This regulation significantly limited the circumstances in which employers could be classified as joint employers.  More specifically, liability for joint employers depended on four primary factors found in the decision of the U.S. Court of Appeals for the Ninth Circuit in Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983).  Those factors were whether the employer (1) hires or fires the employee; (2) supervises and controls the employee’s work schedules or conditions of employment; (3) determines the employee’s rate and method of payment; and (4) maintains the employee’s employment records.    Ultimately, and favoring employers, The Joint Employer Final Rule allowed employers to exercise additional control over non-employees without implicating liability jointly and severally with any other joint employer of the employees for complying with the wage and hour provisions of the FLSA.

Current Status of Joint Employer under The Rescission Final Rule

The Biden administration and the DOL have announced the recission of The Joint Employer Final Rule, in which the four-factor analysis will no longer carry the same weight.   Thus, employers will now have more potential liability as a joint employer.  For example, an employer may now be required to adhere to minimum/overtime wages regulations, and other wage and hour violations.  This will particularly impact independent contractors and other businesses hired for services.

If you have questions about your rights under The Rescission Final Rule, or you believe that your employer has violated your rights in any way, we can help.  To discuss your situation or to speak to an attorney familiar with workplace rights, contact Borrelli & Associates, P.L.L.C. to schedule a free consultation through one of our websites, www.employmentlawyernewyork.com, www.516abogado.com, or any of our phone numbers: (516) 871-4267, (516) ABOGADO, or (212) 679-5000.