Labor Department Announces Proposed Rule to Clarify Joint Employer Status

The Labor Department today announced a proposed rule to provide a clearer methodology for determining joint employer status. The proposal is meant to provide employers clarity and certainty regarding their responsibility to pay federal minimum wage and overtime for all hours worked over 40 in a workweek.

To establish whether one company is a joint employer of another company’s workers, the Labor Department intends to propose four factors 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;
• Set the employee’s pay rate and method of payment; and
• Maintain the employee’s employment records.

The proposal also includes a set of joint employment examples that would further assist in clarifying joint employer status.

The agency said this is the first meaningful revision to its joint employer regulation since 1958.

NAHB believes the Labor Department’s focus on whether the potential joint employer actually exercises the power is a necessary and important step in the right direction.

NAHB will review the rule in more detail once it is published in the Federal Register, and interested parties will have 60 days to submit comments.

For more information, contact David Jaffe at 800-368-5242 x 8317 or Alexis Moch at x8407.