Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupportContact
Search
Close

Not an April Fool’s Day Joke – Labor Department Proposes Regulation to Limit Joint Employer Wage and Hour Liability

By Andrew Cleves on April 2, 2019
Email this postTweet this postLike this postShare this post on LinkedIn

On April 1, the U.S. Department of Labor proposed a new regulation for determining a company’s joint employer status under the Fair Labor Standards Act. When two companies are deemed joint employers, they share responsibility for the workers’ wages, which include the payment of minimum wages and overtime. Under the new rule, the Labor Department would analyze the following four factors in evaluating whether a company jointly employs workers:

  • Whether the company hires or fires the employees
  • Whether the company supervises and controls the employees’ work schedule or conditions of employment
  • Whether the company determines the employees’ rate and method of pay; and
  • Whether the company maintains the employees’ employment records.

The Labor Department proposed the new rule to determine, as a matter of economic realty, whether a company actually exercises sufficient control over an employee to qualify as a joint employer. In the Labor Department’s estimation, a business model (e.g., franchise or staffing) does not alone indicate joint employer status under the FLSA. Rather, the company must exercise sufficient control over the employee.

If implemented, this new regulation will limit companies’ shared wage and hour liability and follows the trend established by other agencies within the Trump administration. As we previously reported, in September 2018 the National Labor Relations Board proposed to limit the circumstances under which a company would be considered a joint employer under the National Labor Relations Act.

For now, the waiting game begins. Before the rule can go into effect, the Labor Department must publish it in the Federal Register for public comment. As we have done consistently, Frantz Ward attorneys will monitor developments on this proposed rule and other joint employer liability developments.

Photo of Andrew Cleves Andrew Cleves

Andrew’s practice focuses on employment law and labor relations. He advises and represents employers in a broad range of matters, including discrimination, harassment, retaliation, misappropriation of trade secrets, and breaches of non-competition and other types of employment agreements. Andrew has appeared on behalf…

Andrew’s practice focuses on employment law and labor relations. He advises and represents employers in a broad range of matters, including discrimination, harassment, retaliation, misappropriation of trade secrets, and breaches of non-competition and other types of employment agreements. Andrew has appeared on behalf of management in state and federal courts and before arbitrators and various administrative agencies. Andrew also has represented employers in traditional labor matters, including at arbitrations and before the National Labor Relations Board and State Employment Relations Board.

When not involved in active litigation, Andrew counsels employers of all sizes on key issues, such as employee discipline, employee handbook and policy development, leave administration, wage and hour compliance, union organizing efforts, and various aspects of the collective bargaining process. Andrew also drafts employment agreements and state-specific policies.

Read more about Andrew ClevesEmailAndrew's Linkedin Profile
Show more Show less
  • Posted in:
    Employment & Labor
  • Blog:
    Labor & Employment Law Navigator
  • Organization:
    Frantz Ward LLP
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
The Library at LexBlog
  • About LexBlog
  • The Field We Built
  • Library at LexBlog
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo