Man with face mask in workplace

US: Joint Employer Ruling Struck Down by Court for Now

In March, the US Department of Labor (DOL) issued a final rule that narrows the situations where multiple employers share liability for paying their workers’ wages and complying with minimum wage requirements.

That ruling was challenged by 17 states and has recently been struck down by the US District Court for the Southern District of New York, arguing the regulation is “arbitrary and capricious” and inconsistent with the Fair Labor Standards Act. This means the old rule applies for now, and that companies will need to comply with it if they share responsibility for employment with other organizations.

The joint employer regulation defines the circumstances under which employers, such as a franchiser and its franchisee, are considered joint employers of a group of workers and therefore share responsibility for paying the minimum wage and overtime. The new DOL rule was designed to take some of the burdens off joint employers, but opponents argue it makes it easier for companies to commit wage violations and fails to protect employees sufficiently.

Takeaway: The DOL is challenging the courts on the ruling, and the outcome is uncertain. If your company engages workers through channels that could fall under the old definition of a joint employer, be sure to follow the progress of the ruling. A diligent workforce solutions partner can provide guidance regarding workers engaged through staffing partners or other potential relationships that may fall under the rule.


Coronavirus Considerations for Businesses

North America

US: Worker Classification Laws Further Defined

US: Federal Regulators Tighten Rules on H1-B Visas

Canada: New Ruling Reinforces Employer Responsibility in Terminations


UK: Migration Committee Advises Review of Shortage Occupations List

UK: IR35 Tax Update – Clarifies End-User Liability When Supply Chain Fails to Pay

Spain: Government Issues New Law on Remote Working


Australia: Underpayment of Workers Prompts Fines

India: New Law Protects the Informal Workforce

Singapore: Government Tightens Requirements for Foreign Workers

This update contains general information only, and AGS is not rendering legal advice. Before making any decision or taking any action that may affect your business, you should consult qualified legal counsel. AGS shall not be responsible for any loss whatsoever sustained by any person or company who relies on this update.