Are You a Joint Employer? DOL Announces New Rule

By Lisa Scidurlo, Alexander Batoff and Kent Franchise Law Group

On January 16, 2020, the U.S. Department of Labor (“DOL”) finalized and published a new joint employer” rule in the Federal Register, revamping the standard of when, and under what circumstances, two or more entities — staffing and temp agencies and their business-clients, and franchisor-franchisee relationships, in particular — are considered “joint employers” of individual employees for purposes of liability under wage and hour laws like the Fair Labor Standards Act (“FLSA”) and other labor and employment laws. The new rule, which will become effective on March 16, 2020, calls for a four-part test that makes it much more difficult to impose joint employer liability and, consequently, is considered more favorable to employers’ interests than the old standard.

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