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Joint Employer Rule

The Status of the Dept of Labor’s (DOL) Joint Employer Rule and Biden’s Employment Law Agenda

Right after Joe Biden took office as the 46th President of the United States we wrote a blog post detailing expected changes in employment law with the new administration. This blog post is a follow-up to our first post; we’ll discuss the change in rules that have been implemented and what’s still to come.

Joint Employer Ruling

In July 2021, the Department of Labor (DOL) announced its plans to rescind a rule on Joint Employer Status under the Fair Labor Standards Act from March of 2020. The action, which removed the regulations that were established in the 2020 ruling, went into effect on September 28, 2021. 

The 2020 rule contained standards for joint employers who followed both vertical and horizontal joint employment.

Vertical joint employment is when an employee works for one employer, such as a staffing agency, but is economically dependent on another business — most commonly, the staffing agency’s client — for whom they provide their services for.

Horizontal joint employment happens when an employee is employed by more than one distinct employer.  

Vertical and horizontal joint employers are jointly and severally liable for complying with Wages and the Fair Labor Standards Act (FLSA) provisions for wage and hourly pay.

The 2020 Rule created four key points that could be used to help determine whether an employer is considered a vertical joint employer: 

  • Whether the employer hires or fires the employees,
  • Is in charge of creating and maintaining employee work schedules or conditions of employment to a significant degree,
  • Determines rate and method of payment for employees, and
  • Maintains the employment records of employees. 

In terms of horizontal joint employment, the 2020 Rules noted: 

  • If employers are acting independently of one another and are disassociated in terms of the employment of the employee, they are not considered joint employers, but
  • If the employers are sufficiently associated in terms of the employment of the employee, they are considered joint employers and therefore are required to aggregate the hours worked by employees to ensure FLSA compliance.

Under the original rule, which is currently in effect after the rescissions of the 2020 rule, it is expected that more businesses shall be found to joint employers.

Other labor law changes that President Biden has enacted or that we’re still waiting for him to enact include:

Minimum Wage

President Biden has long touted his plans to raise the minimum wage. In April 2021, he put those words in action when he signed an executive order requiring federal contractors and subcontractors to pay employees a minimum of $15/hour by January 2022.

The minimum wage for contractors is currently $10.95 under a rule that was enacted by the Obama administration in 2014.

The federal minimum wage for non-government contractors is still $7.25 an hour, although many cities and states are creating laws to set their minimum wages higher. The House of Representatives has also even passed a bill to raise the federal minimum wage to $15/hour by 2025. However, the legislation has still not advanced in the senate.

Anti-Discriminatory and Inclusive Practices

Employers should expect expanding protections in the workplace for women, minorities, and the LGBTQ+ community. 

In January 2021, President Biden signed Executive Order 13988. The provisions of the bill are intended to combat and prevent discrimination on the basis of gender identity and sexual orientation. The order applies to executive and independent federal agencies.

Biden also supports H.R. 5, the Equality Act, which passed the House in February of 2021. This act takes it one step further than Executive Order 13988 by outlining Title VII’s prohibition on employment discrimination based on a person’s sex by including “because of sexual orientation or transgender status.”

The act amends Title VII and other civil rights laws to ban discrimination based on sexual orientation and gender identity.

The act expanded the definition of the term “sex” to include: 

  1. A sex stereotype
  2. Pregnancy, childbirth, or a related medical condition
  3. Sexual orientation 
  4. Gender identity
  5. Sex characteristics, including intersex traits 

We are still waiting for the passage of the Equality Act, which is not guaranteed as it requires 60 votes to overcome an anticipate Republican Senate filibuster. But, it’s still a good idea for employers to review and revise all discrimination policies.

The Biden administration is also making moves in terms of religious discrimination, rescinding a Trump-era rule broadening exemptions for federal contractors. This move will bring anti-discrimination protections more in line with those of past administrations. In the proposal, DOL argued the Trump-era rule “departs” from standard interpretations of civil rights laws that ban employment discrimination that presidents have expanded since the 1940s.

If you have any questions, comments, or concerns about these changes or what’s to come, our firm offers in-person and virtual consultations. We are also available for any corporate, commercialemployment or family law issues. Please call our office at 305-460-0145 to schedule a consultation.

Business Law, Business Lawyer, Company Policies, Employee Handbook, Employment Employer Representation, Employment Law, FLSA, Franchises, Franchisor, Joint Employer

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