It has been over 60 years since the Fair Labor Standards Act has been updated regarding joint employer status. A final ruling providing more consistency in court decisions on the matter has been made today which clarifies FLSA joint employer status and may therefore reduce litigation costs that often arise from employer nonconformity. This final rule will go into effect 60 days after the date of publication.
The Wage and Hour Division has developed the following four‐factor balancing test to determine FLSA joint employer status, asking whether the employer does the following:
- 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.
Additionally, the final rule adds clarity to contractual agreements with the employer, business practices that may or may not create a joint employer status, as well as other situations determining the status.
Learn more about the rule here.