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On April 1, the U.S. Department of Labor’ Wage and Hour Division announced it is issuing a proposed rule to update and clarify its interpretation of joint-employer status under the Fair Labor Standards Act. According to the proposal, the changes are designed to promote certainty for employers and employees, reduce litigation and encourage innovation in the economy.

The DOL’s proposal would ensure employers and joint employers clearly understand their responsibilities to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek. Specifically, they propose a four-factor test for determining joint employment under the FLSA. The DOL will consider whether the potential joint employer actually exercises the power to:

  Hire or fire the employee
  Supervise and control the employee’s work schedules or conditions of employment
  Determine the employee’s rate and method of payment
  Maintain the employee’s employment records

The proposal also provides several examples for comment that would further assist stakeholders in determining joint-employer status. For more information on the joint-employer proposal, see WHD’s website, fact sheet and frequently asked questions page. Additionally, see ABC general counsel Littler Mendelson’s ASAP for further analysis.

WHD also issued a proposal to clarify and update the regulations governing regular rate requirements, which define what forms of payment employers include and exclude in the "time and one-half" calculation when determining workers' overtime rates. For more information see WHD’s website and Littler Mendelson’s analysis. 

The public will have the opportunity to comment on the proposed rules. Comments on WHD’s regular rate proposal are due May 28 and comments on its joint-employer proposal are due 60 days upon publication in the Federal Register.