Department of Labor Rolls Back Joint Employment Guidance

Earlier this month, U.S. Department of Labor (DOL) Secretary Alex Acosta announced that the agency is withdrawing two guidance letters calling for tighter standards for determining joint employment. The first letter, issued in 2015, sought to restrain the misclassification of employees as independent contractors. The second, issued in 2016, called for greater scrutiny of situations in which multiple companies might jointly employ workers.

The DOL decision is one more indication of the changed enforcement priorities of the new administration, to the gratification of many business groups. The International Franchise Association, for example, applauded these “first steps to undo this costly regulation created by the previous administration.”

Supporters of the joint-employer standards disagree, calling the DOL decision disappointing. Christine Owens, executive director of the National Employment Law project, said that the guidance provided valuable assistance to both employers and employees regarding their rights and responsibilities under federal minimum wage law. Rescinding the documents does not change those rights and responsibilities. “All it does is show the Trump Administration’s willingness to take symbolic steps to attack workers – here, at the expense of clarity for all parties,” she said.

In the context of labor law, joint employment has always been a confusing issue. And removal of the DOL guidance letters does nothing to resolve conflicting interpretations of join employment and independent contractor status. The legal landscape surrounding the issue remains unchanged. However, if you have concerns or questions about your company’s responsibilities for independent contractors, we are happy to help.

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