U.S. Labor Department Proposes New Joint Employer Rule

On Monday, the U.S. Labor Department proposed new rules for joint employment that would update standards that have been in place since the late 1950s.

According to an article in Nation’s Restaurant News, the Labor Department wants to utilize a four-part test to clarify whether two companies share liability for labor laws like minimum wage and overtime pay.

“The test will assess whether the potential joint employer actually exercised 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; and maintain the employee’s work records,” the article read.

The proposed regulation is poised to narrow liability for franchisors and companies that utilize third-party staffing firms. The IFA, for one, touted the change, saying it “creates certainty for America’s 733,000 franchise businesses,” according to the article.

The Labor Department’s proposed regulations are subject to a 60-day public comment period, the article noted.