The US Department of Labor today announced a final rule to rescind an earlier rule, “Joint Employer Status under the Fair Labor Standards Act,” that took effect in March 2020. By rescinding that rule, the department will ensure more workers receive minimum wage and overtime protections of the Fair Labor Standards Act. The rescinded rule included a description of joint employment contrary to statutory language and Congressional intent.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 US 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. The final rule becomes effective Sept. 28, 2021.
