July 23, 2019

July 23, 2019

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July 22, 2019

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Are You a Joint Employer? That May Change Under the DOL’s Proposed New Test

As announced in an April 1, 2019, Notice of Proposed Rulemaking, the DOL has proposed to substantially revise the standard for determining joint-employer status conferring joint and several liability upon the primary employer and any other joint employers for all wages due to employees under the FLSA. Unlike the current regulations—under which two or more entirely independent entities may be found to jointly employ an employee who performs work in a workweek that simultaneously benefits both of them if they are “not completely disassociated” with respect to that individual’s employment—the proposed new rule would determine joint-employer status by a four-part test assessing whether the potential joint employer actually exercises the power to (1) hire or fire, (2) supervise and control work schedules or conditions of employment, (3) determine the rate and method of payment, and (4) maintain employment records. While additional factors may be considered, the proposed rule explains that an employee’s “economic dependence” on the employer would not be relevant under the new standard, nor would certain business models and practices and contractual agreements be pertinent.

The DOL’s proposal coincides with similar rulemaking activity by the National Labor Relations Board (“NLRB”) in September 2018. Under the NLRB’s proposal, two employers would be considered joint employers only when the putative joint employer possesses and exercises “substantial direct and immediate control over the essential terms and conditions of employment of another employer’s employees in a manner that is not limited and routine.” The period for comments on the NLRB’s proposed rule closed on January 28, 2019, and it is anticipated that the rule will be formally adopted later this year. The comment period in the DOL’s proposed rule is set to close on June 10, 2019. Hospitality owners/operators should stay tuned for further developments on both fronts, as joint-employer status is often a point of dispute when an employee lodges claims against one or more putative employers.

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About this Author

ADRIANA S. KOSOVYCH, Epstein Becker Green, Pre-Employment Considerations Lawyer, Workforce Management Attorney, New York
Associate

ADRIANA S. KOSOVYCH is an Associate in the Employment, Labor & Workforce Management practice, in the New York office of Epstein Becker Green.

Ms. Kosovych’s experience includes:

  • Representing clients in employment-related litigation on a broad array of matters, including claims of discrimination, harassment, retaliation, failure to accommodate disabilities, breach of employment contracts and restrictive covenants, and wage and hour disputes, in state and federal courts and before various...

212-351-4527
Jeffrey H. Ruzal, epstein becker green, new york, fair labor, employment
Member

JEFFREY H. RUZAL is a Member in the Labor and Employment practice, in the New York office of Epstein Becker Green.

Mr. Ruzal's experience includes:

  • Representing employers in employment-related litigation in federal courts and before administrative agencies

  • Representing employers in the defense of putative collective actions under the Fair Labor Standards Act and class actions under the New York State Wage and Hour Law

  • Advising management on a wide variety of employment law matters, including discrimination and harassment issues, among others

  • Representing clients in single-plaintiff and class action claims arising under ERISA and other benefits litigation

212-351-3762