The U.S. Department of Labor announced updated guidance and regulations this week for joint employer status under the Fair Labor Standards Act. The final rule updating the regulations provides a four-factor balancing test for determining FLSA joint employer status.
The rule's clarifications will improve employers’ ability to remain in compliance with the FLSA and help reduce litigation costs, according to a Jan. 14 U.S. Department of Labor press release that announced the final rule.
“The changes in this final rule break down barriers that keep companies from constructively overseeing, guiding and helping their business partners,” Wage and Hour Division Administrator Cheryl Stanton said in the release. “For small business owners, and the employees working in those businesses, the relationship and the guidance coming from franchisors and other contracting companidees can greatly improve the workplace and help them create jobs.”
The final rule, which is posted here, will be effective March 16, 2020.