Transportation Law Update: USDOL Announced Extension of Rescission of the Joint Employer Rule
The United States Department of Labor (USDOL) announced The Final Rule: Joint Employer Status Under The Fair Labor Standards Act becomes effective Tuesday, October 5, 2021.
Under the Biden administration in June of 2021, the USDOL rescinded the rules relating to independent contractors and joint employers which took effect in March of 2020. The standard is important because Federal Labor Standards Act (FLSA) responsibilities and liability for worker protections do not apply to a business that does not meet the definition of employer. Under the FLSA, an employee can have more than one employer for the work they perform.
The Department believes the Rule improperly narrowed the test for joint vertical employment or situations where two business entities control an employee’s schedule, assignments, training, and supervision. The Rule also conflicted with decades of Department interpretation, text of the FLSA, and Congressional intent.
With respect to the independent contractor rule, the transportation industry anticipated clarification on the criteria to meet the independent contractor test as the independent contractor model is popular in the industry.