Labor Department’s reworked joint employer rule restores common sense
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The Labor Department came out with a draft rework of its joint employer rule. CEI labor policy expert Sean Higgins points to some good fixes but underscores the need for Congress to reform the law instead of leaving decisions to regulators:
“The proposed rule by the Labor Department’s Wage and Hour Division to amend the Fair Labor Standards Act on joint employer status would deliver much-needed clarity to a vexing issue.
“A ‘joint employer’ is a business that exercises sufficient control over another employer’s workers—particularly hiring, firing, supervision, scheduling, or pay—such that it may share legal responsibility for workplace law violations.
“The new proposed rule provides a more precise definition of ‘indirect control’ – long a sticking point in this issue – that focuses on when the situation involves actual control over workplace rules, not merely having the hypothetical power to affect them, as the Biden-era iteration of the rule tried to establish. This new proposal will protect businesses, especially franchise operations that help young entrepreneurs get their start.
“That said, the joint employer rule has been re-examined repeatedly, with each change at the White House, and this pattern will likely continue. What is really needed is for Congress to pass legislation that codifies a sensible joint employer standard into law.”
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