On Jan. 12, the U.S. Department of Labor’s Wage and Hour Division released its final rule to update and clarify its interpretation of joint-employer status under the Fair Labor Standards Act.

ABC applauds the Trump administration for issuing the final rule, which will bring additional clarity to a confusing area of the law, help alleviate unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry, reduce needless litigation and encourage innovation in the economy. 

According to a DOL news release, the final rule includes a four-factor balancing test for determining FLSA joint-employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The balancing test examines whether the potential joint employer:

  • Hires or fires the employee;
  • Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • Determines the employee’s rate and method of payment; and
  • Maintains the employee’s employment records.

ABC’s general counsel, Littler Mendelson P.C., published an analysis with more information on the DOL final rule.

ABC submitted comments in support of the proposed changes during the DOL’s rulemaking process.

The final rule is expected to be published in the Federal Register on Jan. 16 and will go into effect 60 days after the date of publication.

In addition to the DOL rulemaking, the National Labor Relations Board is expected to release its final rule on the joint employer standard, and the U.S. Equal Employment Opportunity Commission intends to issue a proposed rule on its interpretation of when an entity qualifies as a joint employer under the federal EEO laws.