Trump’s DOL Rescinds Obama-Era Franchise Rule

Inside Sources discusses the rollback of the joint employer rule with Trey Kovacs.

The Department of Labor (DOL) withdrew Wednesday from an Obama-era rule which critics argue put unnecessary burdens on franchises.

Former President Barack Obama oversaw significant changes to labor law during his time in office. The business community expressed particular concern over changes made to the joint-employer standard. The standard determines whether an employer is responsible for the employees and labor liabilities of a company it contracts with.

Employers take on a lot of legal burdens and costs when they become joint-employers. The National Labor Relations Board (NLRB) brought about the new standard by changing how it ruled on those cases. The Department of Labor (DOL) announced its intent to upend the new standard in a statement.

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“Labor Secretary Acosta’s decision to rescind regulator guidance on independent contractor and joint employer rules is a positive sign this administration will reverse federal rules that needlessly hamstring worker and employer flexibility in the modern workplace,” Trey Kovacs, labor policy expert at the Competitive Enterprise Institute, said in a statement provided to InsideSources. “The labor rules at issue amounted to informal regulatory ‘dark matter’ that made it harder for people who want to be in business for themselves and punished large companies for contracting with smaller ones.”

Read the full article at Inside Sources.