Proposed Changes to Existing Regulations Concerning Joint Employment Under the Fair Labor Standards Act (FLSA)

On April 1, 2019, the Department of Labor (DOL) announced it will publish a notice of proposed rulemaking (NPRM) to amend existing regulations concerning joint employment under the Fair Labor Standards Act (FLSA). Being the first meaningful proposed revision to joint-employer regulation under the FLSA since 1958, the NPRM aims to provide employers a more concise set of rules to determine when an employer may be deemed a joint employer with another company’s employees.

Over the past several years, joint employment has been a contentious issue in labor law. In 2016, the DOL, under the Obama administration, issued an “Administrator’s Interpretation” (AI) on joint employment under the Fair Labor Standards Act (FLSA). In June 2017, the DOL, under the Trump Administration, rescinded the AI, to make it more difficult to establish joint employment between multiple putative employers, ultimately hurting employees who are hired by small contractors, to provide the labor force for large construction contractors and other similar industries. By having small contractors provide the labor force, large contractors are able to obtain the lowest bidders on contracts, saving on labor costs, while evading payment of time and one-half for hours over 40 per week, promised higher hourly rates, and other benefits.

We are hopeful that these proposed changes to the joint employment regulations are not adopted. If you or someone you know works or worked for a small contractor, but the daily work is supervised by a large contactor’s foremen, the general contractor requires weekly or daily meetings, the general contractor requires filling out timesheets, and provides equipment and uniforms, it is possible that there is a joint employment relationship, and if you have not been properly paid for all of your hours worked, including time and one-half for hours over 40 per week, multiple companies that you worked under, may be liable for the failure to pay you and others similarly situated, all of your wages due.