D.O.L. Ruling Impacts Cleaning Franchises And Contracting Companies

The U.S. Department of Labor has made a final ruling to update the regulations  interpreting joint employer status under the Fair Labor Standards Act (FLSA), it announced in a statement.

Under the FLSA, an employee may have, in addition to his or her employer, one or more joint employers — additional individuals or entities that are jointly and severally liable with the employer for the employee’s wages. The FLSA requires covered employers to pay their employees at least the federal minimum wage for every hour worked and overtime for every hour worked over 40 in a workweek.

The change marks the first large update to the joint employer status regulations in more than 60 years. It impacts franchisers and contracting companies, such as those involved in the commercial cleaning industry.

In the final rule, the department provides a four-factor test for determining FLSA joint employer status in situations where an employee performs work for one employer that simultaneously benefits another entity or individual. The test examines whether the potential joint employer:

— Hires or fires the employee

—  Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree

— Determines the employee’s rate and method of payment

— Maintains the employee’s employment records

The final rule also clarifies when additional factors may be relevant to a determination of FLSA joint employer status and identifies certain business models, contractual agreements with the employer, and business practices that do not make joint employer status more or less likely.

The final rule will be effective March 16.

For more on the ruling, visit the Federal Register website.