FLSA Joint Employer Proposed Rule is Out
The U.S. Department of Labor (DOL) released its proposed rule to determine joint employer status under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The proposed rule is largely similar to a rule finalized in 2020, a portion of which was subsequently struck down by a federal district court, and the entirety of which was rescinded in 2021 by the Biden DOL. DOL will accept comments on its proposal for sixty days from publication in the Federal Register.
For many clients, the proposed rule’s test for vertical joint employment – where, for example, a motor carrier contracts with a fleet contractor with employee drivers and the issue is whether the motor carrier is the joint employer of those drivers – is of most relevance. That test, slightly modified in response to the district court decision that struck down the prior vertical joint employment test, looks to four factors examining whether the potential joint employer: (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.
The test will consider a potential joint employer’s power or reserved right to act in relation to the employee, but considers actual exercise of control more relevant. In a change from the 2020 regulation, the proposal does not require actual exercise of control to find joint employment. The proposal also notably provides that compliance with and monitoring of general (as opposed to specific as in the 2020 regulation) legal obligations or health and safety standards does not weigh in favor of or against joint employment.
In another variation, the proposal allows for wider consideration of other factors but emphasizes that if the four delineated factors point in the same direction, the additional factors are highly unlikely to outweigh that result. Recognizing that there are a variety of tests utilized for determining joint employment, DOL intends the proposal to provide clarity and a level of uniformity.
For more information, contact Greg Feary, Prasad Sharma, Shannon Cohen, David Robinson, Steve Pletcher, or Jack Finklea.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
FLSA Joint Employer Proposed Rule is Out
The U.S. Department of Labor (DOL) released its proposed rule to determine joint employer status under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The proposed rule is largely similar to a rule finalized in 2020, a portion of which was subsequently struck down by a federal district court, and the entirety of which was rescinded in 2021 by the Biden DOL. DOL will accept comments on its proposal for sixty days from publication in the Federal Register.
For many clients, the proposed rule’s test for vertical joint employment – where, for example, a motor carrier contracts with a fleet contractor with employee drivers and the issue is whether the motor carrier is the joint employer of those drivers – is of most relevance. That test, slightly modified in response to the district court decision that struck down the prior vertical joint employment test, looks to four factors examining whether the potential joint employer: (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.
The test will consider a potential joint employer’s power or reserved right to act in relation to the employee, but considers actual exercise of control more relevant. In a change from the 2020 regulation, the proposal does not require actual exercise of control to find joint employment. The proposal also notably provides that compliance with and monitoring of general (as opposed to specific as in the 2020 regulation) legal obligations or health and safety standards does not weigh in favor of or against joint employment.
In another variation, the proposal allows for wider consideration of other factors but emphasizes that if the four delineated factors point in the same direction, the additional factors are highly unlikely to outweigh that result. Recognizing that there are a variety of tests utilized for determining joint employment, DOL intends the proposal to provide clarity and a level of uniformity.
For more information, contact Greg Feary, Prasad Sharma, Shannon Cohen, David Robinson, Steve Pletcher, or Jack Finklea.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.