Labor Department Issues Final Joint Employer Rule
The Labor Department (DOL) yesterday announced a final rule to provide a clearer methodology for determining joint employer status. The rule will provide employers clarity and certainty regarding their responsibility to pay federal minimum wage and overtime for all hours worked over 40 in a workweek.
Where an employee performs work for the employer that simultaneously benefits another individual or entity, the Labor Department provides a four-part test to determine whether the potential joint employer actually exercises the power to:
- Hire or fire the employee;
- Supervise and control the employee’s work schedules or conditions of employment;
- Set the employee’s pay rate and method of payment; and
- Maintain the employee’s employment records.
Whether a person is a joint employer will depend on all the facts in a particular case. Additional factors may also be relevant in determining whether another person is a joint employer in this situation, but only when they show whether the potential joint employer is exercising significant control over the terms and conditions of the employee’s work.
The new rule will take effect on March 16. It includes a set of joint employment examples to further assist in clarifying joint employer status.
“This final rule furthers President Trump’s successful, government-wide effort to address regulations that hinder the American economy and to promote economic growth,” said Secretary of Labor Eugene Scalia.
NAHB welcomes the rulemaking from DOL's Wage and Hour Division as two other federal agencies similarly seek to narrow their definitions of joint employment. Under the broader interpretations utilized by the Obama administration, builders faced uncertainty about what level of necessary oversight and coordination of their subcontractors might trigger joint employer liability.
For more information, contact David Jaffe.
Latest from NAHBNow
As energy efficiency mandates are becoming more difficult and costly to meet, the National Green Building Standard (NGBS) is emerging as an attractive alternative. Alternative code compliance options - like NGBS Green - are beneficial to local jurisdictions and builders alike, as they provide compliance flexibility without compromising energy performance, and can streamline permitting processes and timelines.
Builder and Associate members will work to recruit as many new members as they can by Nov. 30. Winners can earn prizes including LG laundry products and 2027 International Builders' Show perks.
Latest Economic News
The percentage of new apartment units that were absorbed within three months after completion was down five percentage points in the first quarter, according to the Census Bureau’s latest release of the Survey of Market Absorption of New Multifamily Units (SOMA).
New single-family home size had been falling since 2015 in response to declining affordability conditions. An exception occurred in 2021, when new home size increased as interest rates reached historic lows.
The latest report shows the Federal Reserve’s preferred inflation gauge remains sticky in July, complicating the Fed’s path to its long-term 2% target. Meanwhile, consumer spending remains resilient but is showing signs of slowing, with real consumer spending unchanged in July. Households are pulling back on spending amid persistent inflation.