NFIB: Final DOL Joint-Employer Rule Provides Much-Needed Clarity for Small Business Owners

Date: January 13, 2020

Washington, D.C. (January 13, 2020) – NFIB issued the following statement from Karen Harned, Executive Director of the NFIB Small Business Legal Center in response to the United States Department of Labor’s final rule that simplifies and updates its regulations that determine joint-employer status under the Fair Labor Standards Act:

“Small and independent businesses need a standard for determining joint-employer status that is easier to understand, simpler, and less expensive to administer. Citing NFIB, the Department of Labor noted the concerns and needs of small business owners, such as the fact that “small and independent businesses cannot afford the lawyers, accountants, and clerks that larger companies use to decipher complex regulations and implement costly business systems necessary to comply with the regulations.” The Department of Labor’s new rule provides much-needed clarity by setting forth such a standard that helps alleviate small business owners’ uncertainty and decrease compliance costs.”

In the new rule, the Department of Labor offers a four-factor balancing test for determining joint-employer status in situations where an employee performs work for one employer that simultaneously benefits another person. The balancing 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; and
  • maintains the employee’s employment records.

NFIB filed comments in support of the Department of Labor’s proposal to simplify the test for determining joint-employer status.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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