Alexander Statement on Department of Labor Final Joint Employer Rule

WASHINGTON, January 13, 2020 — Senate Labor Committee Chairman Lamar Alexander (R-Tenn.) today released the following statement on the U.S. Department of Labor’s final rule on the joint employer standard:

“The new joint employer rule will help restore to franchise owners—those who are hurt the most by the current patchwork of joint employer standards—the opportunity to make their way into the middle class. The rule gives businesses and workers a clear standard as to whether employees have two different employers, and I commend Secretary Scalia and the Administration for helping solve this problem for the owners of 733,000 franchise locations, including the 17,000 in Tennessee.”

Background:

• In January 2016, the Obama Administration released joint employer guidance that broadened its joint employer interpretation under the Fair Labor Standards Act (FLSA).
• In June 2017, the Trump Administration withdrew the Obama Administration guidance that expanded joint employer liability.
• In April 2019, the Trump Administration proposed a rule that establishes a four-factor test for determining joint employer status.
• Currently, there is a patchwork of standards applied by various federal courts and the Labor Department as to whether employees have two different employers.
• The Department of Labor today released a final rule establishing a joint employer test that provides employers and employees with clarity and predictability.
• This test examines whether a supposed joint employer actually exercises the power to hire or fire employees, supervise and control employees’ work schedules or employment conditions to a substantial degree, set the employees’ rate and method of pay, and maintain the employees’ personnel records.

###