The Labor Department on Monday proposed a new four-factor test to help employers determine the conditions under which they would be considered “joint employers.”
Senior living industry companies and other types of firms that use temporary workers or contractors through staffing agencies would receive clarification on when they have minimum wage and overtime pay obligations for particular workers.
The Fair Labor Standards Act requires covered employers to pay nonexempt employees at least the federal minimum wage for all hours worked and overtime for when an individual works more than 40 hours in a workweek. “Although the FLSA does not use the term “joint employer,” the act contemplates situations where additional persons are jointly and severally liable with the employer for the employee’s wages due under the act,” the proposed rule states.
The proposed rule has not been published in the Federal Register yet. Once it is, interested parties will have 60 days to comment.
“This proposal will reduce uncertainty over joint employer status and clarify for workers who is responsible for their employment protections,” Labor Secretary Alexander Acosta said. “Providing public notice and comment is the best way to move forward with another significant deregulatory proposal.”
The four-factor test would consider whether the potential joint employer has 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.
- Maintain the employee’s employment records.
The proposed rule also includes examples designed to further help clarify when joint employer status exists.
The Labor Department proposal released Monday is separate from a proposed joint employer rule issued in September by the National Labor Relations Board. The NLRB proposed rule would affect joint employer liability for collective bargaining and unfair labor practices. Under the proposed rule, a senior living operator or other employer would be defined as a joint employer of another company’s workers only if it “possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.”