Matt Purushotham
Wed, 08/18/2021
On July 30, 2021, the Department of Labor officially withdrew the Trump-era Joint Employer Final Rule, which made it more difficult for employees illegally denied proper minimum wage and overtime compensation to establish that they were jointly employed by more than one employer.
The now-rescinded Final Rule departed from the DOL’s previous position, and the standard adopted by some federal courts for determining whether an employee was jointly employed by multiple employers. The Final Rule had required that employees show that a proposed joint employer actually exercised various forms of control over them, such as hiring or firing, controlling their schedule, and determining their rate of pay, instead of the employee only being required to show that the employer retained the authority to exercise such control.
Withdrawal of the Final Rule followed a federal district court’s ruling in September 2020 that the Final Rule was illegal because it was inconsistent with the Fair Labor Standards Act (“FLSA”), the federal law that establishes workers’ rights to receive the minimum wage and overtime pay. The recession of the Final Rule will build on this ruling and benefit employees of franchises like fast food chains, as well as those who perform janitorial and temporary staffing work through contractors, by making it easier for them to win judgments against the parent companies for violations of the FLSA.
If you are an employee who works for a franchise, staffing agency, or other intermediate employer that is contracted with a larger company, and you believe you are not being paid the wages you are owed under the law, the rescission of the Final Rule may increase the likelihood that you can recover unpaid wages owed to you. If you have questions about how this important change in the law may have affected you, you can contact MSE at info@mselaborlaw.com.
