DOL Clarifies Standard To Determine "Joint Employer" Status

On January 12, 2020, the Department of Labor (DOL) announced its final rule (“Final Rule”) to revise and update the standard for determining “joint employer” status under the Fair Labor Standards Act (FLSA) – the federal law requiring minimum wage and overtime pay. The new rule provides guidance to determine when additional individuals or entities are jointly and severally liable for an employee’s wages as “joint employers” with the employer. When an employee performs work that directly or indirectly benefits not only his primary employer but also another individual or entity, then the additional individual or entity is a “joint employer.” With the Final Rule, the DOL affirmed a new, streamlined, four-factor test to determine who is a “joint employer.” The effective date of the new rule is March 16, 2020.