Editor's note: This article has been updated to reflect the new effective date of the rescission.
The U.S. Department of Labor (DOL) released a new final rule on July 29 that rescinds the previous administration’s “joint-employer” rule that went into effect in March 2020.
Under the now-rescinded rule, the DOL was directed to consider a four-factor test for determining shared liability for related wage and hour violations under the Fair Labor Standards Act (FLSA). Those factors included whether or not an employer:
- Determines employees’ rate and method of payment
- Hires and fires employees
- Maintains employment records
- Supervises and controls employees’ work schedules or conditions of employment to a substantial degree
The new final rule, effective October 5, 2021, reasserts that there is vertical and horizontal joint employment and ensures more workers receive minimum wage and overtime protections under the FLSA. More information on the change is available from the DOL website.
Keith McLemore is an HR & compensation consultant at TASB HR Services. Send Keith an email at email@example.com.
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