Labor Department's New 4-Factor Rule Attempts to Limit Joint Employment

This legal alert was published on January 13^th, 2020 by Marty Heller in Atlanta, Richard Meneghello in Portland, and John Polson in Irvine.

The U.S. Department of Labor just finalized its rule that attempts to limit the scope of joint employment liability for wage and hour matters. Although much remains to be seen, this rule may usher in a new era, and could lead to fewer businesses being found to be joint employers by a court or agency when it comes to minimum wage, overtime, and other similar liability under the Fair Labor Standards Act (FLSA). However, many questions still remain about various aspects of this rule, particularly how courts will apply the test’s four factors as well as the alternative “catch-all” test. You should now reexamine your business models to capitalize on the new standard, which should take effect on or about March 16, 2020.