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DOL Announces Proposed Rule On Joint Employer Arrangements

Volume: 18 | Issue: 8
April 2, 2019

On April 1, 2019, the U.S. Department of Labor (DOL) announced a proposed rule to revise and clarify the responsibilities of employers in joint employer arrangements.

The Fair Labor Standards Act allows joint employer situations where an employer and another company are jointly responsible for the employee’s wages. The DOL’s proposal is intended to ensure that both parties "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." To determine whether a joint employer relationship exists, the DOL proposes a four-factor test to determine 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; and
  • maintain the employee’s employment records.

More information and examples as to how the proposed rule would operate are available on the DOL's website. Once this proposed rule is published in the Federal Register, the public will be invited to submit comments. We will keep you updated on this matter.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.