On Monday, January 13, 2020 the Department of Labor issued its joint employment rule which will be effective on March 16, 2020. The rule adopts a four-part test for assessing whether a company is the joint employer of another company’s employees. The test – which reflects the rule prior to the Obama Administration – considers whether the alleged joint employer hires or fires; supervises or controls work schedules; sets pay rates; and, maintains employment records. According to DOL, the fact that the alleged joint employer has the right or ability to exercise any of the four factors is relevant but not conclusive. Instead, whether the employer actually uses the authority is more relevant to determining joint employment status. The rule thus establishes stiff criteria before franchisers and their franchisees will be found jointly liable for compliance with federal wage and hour laws.
FortneyScott is reviewing the final rule which is scheduled to be published on January 16, 2020 and will provide a more detailed analysis soon. Contact your FortneyScott lawyer for more information.