A proposed new regulation on joint-employment status under the FLSA has gone to the White House for review. In addition, the US Department of Labor is delaying the effective date of its independent contractor classification test until May.
Joint employer rule. The US Department of Labor last week sent a proposed new regulation on joint-employment status under the Fair Labor Standards Act (FLSA) to the White House for review, JD Supra reported. Under the Trump administration, the DOL in January 2020 updated regulations interpreting joint-employment status under the Fair Labor Standards Act; regulations went into effect in March. The final rule included 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. However, a federal judge in September 2020 determined the rule is “arbitrary and capricious,” vacating the department’s new test under the law for determining “vertical employment” when a worker enters a relationship with one company, such as a staffing firm, but is economically dependent on another employer.
The Trump administration’s National Labor Relations Board’s final rule covering joint-employer status is also “on borrowed time,” Reuters reported. The rule was updated last year, reversing the 2015 Browning-Ferris ruling by the Obama-era NLRB. The 2020 rule, which went into effect April 27, applies to issues involving the National Labor Relations Act.
Independent contractor test. The Trump DOL had announced its final rule clarifying the standard for employee versus independent contractor status under the FLSA in January with an effective date of March 8. President Joe Biden ordered a review of all rules that had not yet gone into effect when he took office. The DOL on Tuesday announced it is delaying the rule until May 7, Law 360 reported. The delay, initially announced Feb. 5, would allow additional opportunity for review and consideration of the new rule. Comments were accepted until Feb. 24; the agency received more than 1,500 comments during that time.