January 13, 2020

Are You My Employer? US DOL Issues New FLSA Joint Employer Rule

On January 12, 2020, the U.S. Department of Labor (DOL) announced a new rule that clarifies when two entities may be considered to be joint employers.  (Who knew the DOL worked on Sunday?! )  This rule impacts not only franchisees but many other employers, such as those using workers from a temporary employment agency; outsourcing the HR function to a Professional Employer Organization (PEO); and many small business owners that operate multiple entities.

In the final rule, the department provides a four-factor balancing test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The balancing test examines whether the potential joint employer:

  • Hires or fires the employee;
  • Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • Determines the employee’s rate and method of payment; and
  • Maintains the employee’s employment records.


NOTE: The new rule will take effect on Monday, March 16, 2020. Click here for a copy of the final rule.