The Coalition to Promote Independent Entrepreneurs applauds the U.S. Department of Labor’s issuance of new regulations that clarify joint-employer status for purposes of the Fair Labor Standards Act (“FLSA”). While the focus of the Coalition is on independent-contractor status, joint-employer status is another critically important concern when multiple entities have a connection with the same individual service provider – which can occur in virtually any industry.
If two entities are determined to be “joint employers” of an individual, those entities are jointly and severally liable for FLSA compliance duties with respect to the individual. Though the consequences of being deemed a joint employer can be dire, the test for determining joint employment has been unclear, and different federal courts have applied different standards in making this determination.
The clarity the new regulations bring to determinations of joint employment will be helpful to all stakeholders. These regulations should promote greater uniformity among federal courts that decide cases involving allegations of joint employment.
The Coalition is very appreciative of the Department of Labor’s ongoing efforts to issue clarifying guidance under the FLSA, as such guidance enables companies seeking to comply with the FLSA to structure their business operations with a higher degree of certainty that they will be deemed compliant.
