On Sunday, the US Department of Labor announced its final rule to update the regulations interpreting joint employer status under the Fair Labor Standards Act, or FLSA.
First proposed last April, the rule takes effect March 16.
The final rule includes a four-factor test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. Those factors are whether the potential joint employer:
- Hires or fires the employee;
- Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
- Determines the employee’s rate and method of payment; and
- Maintains the employee’s employment records.
The final rule also clarifies when additional factors may be relevant to a determination of FLSA joint employer status and identifies certain business models, contractual agreements with the employer, and business practices that do not make joint employer status more or less likely.