DOL scraps joint employer rule

The U.S. Department of Labor has announced it’s rescinding the 2020 Joint Employer Determination Rule on Sept. 28. The DOL earlier this year proposed getting rid of the rule. 

Joint employment or co-employment situations occur when two or more organizations supervise the same employees. Joint employers are equally and individually responsible for compliance with labor and employment laws, including the Fair Labor Standards Act. 

The DOL makes joint employment determinations to prevent situations where one employer uses another as a “shield” to avoid compliance obligations. 

The federal labor agency says rescinding the 2020 rule was necessary because its tests for joint employment contradict longstanding agency interpretations and court rulings. DOL also took into account that a federal court had already vacated most of the 2020 rule last year. In that case, the court held that the rule deviated from prior guidance without explaining why.

Employers should continue to comply with the 2020 rule until Sept. 28. After that date, employers should look to agency guidance and court rulings for direction on determining joint employment status under the FLSA.