The U.S. Department of Labor today announced an extension of the effective date of the rescission of the “Joint Employer Status Under the Fair Labor Standards Act” final rule, the Joint Employer Rule. The effective date of the Joint Employer Rule is October 5, 2021.
The rescinded rule included a description of joint employment contrary to statutory language and Congressional intent. The rule also failed to take into account the department’s prior joint employment guidance. The U.S. District Court for the Southern District of New York vacated most of the rule in 2020.
Under the FLSA, an employee can have more than one employer for the work they perform. Joint employment applies when – for the purposes of minimum wage and overtime requirements – the department considers two separate companies to be a worker’s employer for the same work. For example, a joint employer relationship could occur where a hotel contracts with a staffing agency to provide cleaning staff, which the hotel directly controls. If the agency and the hotel are joint employers, they are both responsible for worker protections.
A strong joint employer standard is critical because FLSA responsibilities and liability for worker protections do not apply to a business that does not meet the definition of employer.
The final rule becomes effective October 5, 2021. Until the effective date of the rescission of the Joint Employer Rule, part 791 of Title 29 of the Code of Federal Regulations remains in effect.
