USDOL Proposes Revised FLSA Joint Employer Test

On April 1st, 2019, the U.S. Department of Labor (USDOL) announced a proposed rule revising the Fair Labor Standards Act (FLSA) joint employer regulation. The rule qualifies a business as a joint employer if it meets the following four-factor test and exercises the power to:

  • hire or fire the employee
  • supervise and control employee’s schedule or conditions of employment
  • determine employee’s rate and method of pay
  • maintain employee’s employment records

Additional factors may be used to determine joint employer status, but only if they indicate the potential joint employer’s:

  • Significant control over the terms and conditions of the employee’s work, or
  • Direct or indirect actions in the interest of the business in relation to the employee

Factors that would NOT determine joint employer status include:

  • Employee’s economic dependence on the business
  • Business’s ability, power or reserved contractual right to act in relation to the employee
  • Business model (for example, operating as a franchisor)

The rule provides a number of hypothetical examples to illustrate joint employer status.

The public will have 60 days from the date of the rule’s publication in the Federal Register (which has yet to be made) to comment on the proposed rule.

For more information, see the USDOL website, the USDOL Fact Sheet or the Notice of Proposed Rulemaking.