Labor Department Proposes Rule Clarifying Joint Employer Liability

Contracting businesses using subcontractors to perform portions of the work the contractor is hired to do have long faced uncertain exposure to federal labor law liability if the subs failed to pay required minimum wages or overtime pay, and different state courts have handed down differing interpretations of the concept of “joint employer” when exercising some aspects of scheduling and directing work by subcontractor tradespeople. In a proposed new rule open for comments until June 10, 2019, the Department of Labor has provided examples which clarify that in most construction contracting situations a general contractor will not be determined to have liability as a joint employer of the tradespeople working for its subcontractors.

The text of the proposed rule and the examples provided by the Labor Department can be found here: https://www.dol.gov/whd/flsa/jointemployment2019/