DOL Rolls Back Joint Employer Standard a Bit
A short statement by the Department of Labor last week—that Obama-era guidance on joint employer is being rolled back—has franchisors and their attorneys resting more easily. Workers’ advocates, of course, would not be pleased.
Until 2015, the department said an employer could be held responsible for workplace violations only if the company had “direct control” over that workplace. In 2015 and 2016 under President Obama, the department changed the standard to “indirect control,” a much broader interpretation. Yesterday’s announcement restores the direct control standard on the part of the Department of Labor.
The National Labor Relations Board, an independent agency that was the first to adopt the broader standard and is the chief enforcer of workforce rules, is sticking with the old guidance for now.
Bloomberg reported in May the Trump administration plans to name attorneys Marvin Kaplan and William Emanuel to fill the two vacant member seats on the National Labor Relations Board, and hopes to have the two confirmed by August.
When the full board is seated, observers expect a “fairly aggressive agenda” to roll back the more “extreme and overreaching decisions” of the board under President Obama, Bloomberg said.
A legal bulletin from Faegre Baker Daniels called the DOL’s move June 7 a victory for franchisors, but only a tiny one. “The withdrawal rescinds the guidance itself but does not alter any regulations or case law dealing with employee/independent contractor classification or joint employment,” the note said. Employers “must continue to be careful” when entering into such arrangements, “but the DOL’s decisions signals that it may take a more pro-employer approach to these issues going forward.”