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New Finalized Rule Clarifies When Employers are Joint-Employers of an Employee

The United States Department of Labor (“DOL”) finalized a new rule (available here) that clarifies the circumstances when employers will be determined to be joint-employers of employees under the Fair Labor Standards Act.

The finalized rule provides a new four factor test for determining when an employer is a joint employer – i.e., whether the employer (1) fires or hires the employee; (2) supervises and controls the employee’s work schedule or conditions of employment to a substantial degree; (3) determines the employee’s rate and method of payment; and (4) maintains the employee’s employment records.

The finalized rule also explicitly excluded an employee’s economic dependence on employers as a factor for determining whether an employer is a joint-employer.

On March 16, 2020, the final rule is in effect and will have consequences for when two or more employers are jointly and severally liable for an employee’s wages.

To read more about this finalized rule, click here.

Authors: Matthew John Markling and the McGown & Markling Team.

Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always changing like the Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.

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