Congress Urges DOL to Modernize FLSA Joint Employer Rules, Praises NLRB

October 05, 2018

Eighty-three House members and 26 senators encouraged Labor Secretary Alex Acosta “to update the joint employer standard for businesses in staffing, franchise, and other contractual relationships under the Fair Labor Standards Act.”

The letters noted that different joint employer tests have developed in the federal circuit courts over time and that the current rules: rely “on court cases from the 1940s and 1950s and do not reflect current case law;” and "need to be modernized and harmonized to limit needless litigation.”

Secretary Acosta reiterated that he is “giving serious consideration to writing a rule” to clarify the joint employer standard at a small business event this week.

The NLRB also published a proposed rule to update its test for joint employer under the National Labor Relations Act on September 14, 2018.

Meanwhile, a federal district court judge recently ruled that a franchisor is not a joint employer with a franchisee under the FLSA because it doesn’t exercise formal or functional control over its franchisees.

Separately, 21 House members sent a letter to NLRB Chairman John Ring praising the Board’s efforts to “restore a reasonable application” of the NLRA and ensure the U.S. economy remains an engine of growth.

Outlook: A proposed rule from DOL is not expected until next year, and both rulemakings (NLRB and DOL) could face considerable opposition, particularly if the Democrats regain control of the House in November.