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State AGs to DOL: Proposed joint-employer rule unlawful

Attorneys general from 18 states and the District of Columbia sent a letter [1] to US Secretary of Labor Alexander Acosta to oppose the Department of Labor’s proposal to change the interpretation of joint employment under the Fair Labor Standards Act, which governs the status and liability of an employer that shares control over the terms and conditions of workers’ employment with another employer.

The attorneys general assert the proposed rule would violate the Administrative Procedure Act, which requires an agency to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”

The letter also states the proposed rule does not adequately reflect today’s workplace relationship and changing organizational and staffing models, with companies outsourcing functions to third-party management companies, independent contractors, staffing agencies or labor providers.

“Notably, the proposed rule encourages employers to avoid liability under the law by simply asserting that, although they had the ability to exercise control, they did not in fact exercise that control. In today’s economy, unreasonably narrowing the scope of joint employment will leave millions of workers vulnerable to unchecked violations of the FLSA.”

The updated regulations would revert to a test from more than 30 years ago, “which has been criticized by many courts,” according to the attorneys general. “By failing to employ a thorough analysis or reflect on the ‘economic reality’ of employment relationships, DOL has failed to adequately justify the Proposed Rule. It does not consider the myriad ways workers are employed today, and Congress’s intent to protect them. Simply put, the Proposed Rule’s narrow, four-factor test is impermissible under the FLSA.”

Signing the letter were the attorneys general from California, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, Minnesota, New York, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.

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