On June 25, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division on its proposed rule to update and clarify its interpretation of joint-employer status under the Fair Labor Standards Act. Additionally, the ABC-led Coalition for a Democratic Workplace submitted comments in support of the DOL’s proposal.

In its comments, ABC applauded the DOL’s proposal to replace the outdated current rule because the text of the rule caused significant confusion among different federal circuit courts, which then “confused and frustrated efforts of construction employers to maintain longstanding industry practices that have allowed the industry to perform services on a cost-efficient basis.”

ABC also expressed support for the DOL’s proposal to exclude the three examples of “economic dependence” factors from the joint-employer analysis relating to the construction industry—whether the employee is in a specialty job or a job otherwise requiring special skill, initiative, judgment or foresight; has the opportunity for profit or loss based on managerial skill; and invests in equipment or materials required for work or the employment of helpers. Additionally, ABC supported the specific exclusion of certain longstanding business practices from the joint-employment analysis, including requirements that another entity institute workplace safety measures, wage floors or sexual harassment policies. Finally, ABC recommended the Department include additional specific exclusions in the final rule. 

Background

Published in the Federal Register on April 9, the DOL’s proposal would ensure employers and joint employers clearly understand their responsibilities under the FLSA to pay at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek. 

Specifically, the DOL proposes a four-factor test for determining joint employment under the FLSA and will consider whether the potential joint employer actually exercises the power to:

  Hire or fire the employee;
  Supervise and control the employee’s work schedules or conditions of employment;
  Determine the employee’s rate and method of payment;
  And maintain the employee’s employment records.

More details can be found in the proposal and in a fact sheet on the DOL website.

ABC will continue to provide status updates on the DOL’s joint employer rule in Newsline.