The U.S. Department of Labor is rescinding the joint employer rule that took effect in March 2020, the department announced Thursday.
The change is being made “[t]o ensure more workers receive minimum wage and overtime protections under the Fair Labor Standards Act,” the Labor Department said in a tweet.
“The rescinded rule included a description of joint employment contrary to statutory language and congressional intent.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,” a department press release stated. It also noted that the U.S. District Court for the Southern District of New York vacated most of the rule last year.
The FLSA requires covered employers to pay their employees at least the federal minimum wage for every hour worked and overtime for every hour worked over 40 in a workweek. The joint employer rule determines when someone is considered an employee of more than one company for the same work.
“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 Labor Department said.
The final rule announced Thursday, which rescinds the previous rule, will become effective Sept. 28.
The change will affect some senior living and care providers that use temporary workers or contractors through staffing agencies, but one industry source told the McKnight’s Business Daily that most would find that the old rule was only slightly more beneficial to them than the new one.