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The U.S. Department of Labor on Monday announced a proposal to “revise and clarify” the issue of joint employers.
An employer attorney described it as a “solid proposal.”
The department announced in 2017 that it was withdrawing the Obama administration’s joint employment and independent contractors guidances, which expanded the definition of employees and was described as a welcome relief to employers.
The DOL said in a statement that its proposal “would ensure employers and joint employers 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.”
The statement said the department is proposing a clear, four-factor test “based on well-established precedent” that would consider 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.
Secretary of Labor Alexander Acosta said in the statement, “The proposal will reduce uncertainty over joint employer status and clarify for workers who is responsible for their employment protections.”
Tammy D. McCutchen, a principal with Littler Mendelson P.C. in Washington, said, “It’s a solid proposal that balances the interests between employers and workers and goes back to what the law has been for many years, even in California.”
The U.S. Department of Labor’s withdrawal of the Obama administration’s joint employment and independent contractors guidances that expanded the definition of employees is a welcome relief to employers, experts say.