New Labor Dept. rule clarifies 'joint employer' standard
Employers have an influx of job openings despite disappointing December report: Workforce analyst
Employbridge chief workforce analyst Joanie Courtney breaks down the December 2019 jobs report and identifies the industries hiring more people.
By CHRISTOPHER RUGABER AP Economics Writer
Continue Reading Below
WASHINGTON (AP) — The Labor Department issued a final rule Sunday that clarifies when a worker is employed by more than one company, an issue that affects franchise businesses such as McDonald's and firms that have outsourced services such as cleaning and maintenance.
The rule, first proposed last spring, replaces an Obama administration policy that potentially made more businesses liable for failures by franchisees or contractors to pay overtime or minimum wages.
The issue has taken on greater importance in recent years as more Americans work for temp firms, contractors and franchises. By some estimates, roughly 14 million Americans are in such "alternative work arrangements."
The new rule, which will take effect March 16, provides a four-part test to determine whether a company is a "joint employer." The tests are: Whether or not it can hire or fire the employee; whether it supervises the employee's work schedule; whether it sets their pay; and if it maintains their employment records.