HR Policy Weighs in Against State Activism on Joint Employer Expansion

HR Policy has joined five other business groups seeking to intervene in support of the U.S. Department of Labor in defending against a challenge in federal court by 18 state attorneys general to the DOL's rule clarifying joint-employer liability for wage and hour violations.

The HR Policy-supported DOL rule, effective March 20 of this year, requires a certain level of direct control over another employer’s employment conditions before a company can be deemed a joint employer.  Significantly, the rule also adopts one of our Workplace 2020 proposals, enabling a company to require certain legal compliance and health and safety standards of its contractors and franchisees without making it a joint employer.

Meanwhile, in Colorado, the Association joined over 100 other business groups in a successful effort that persuaded the Colorado Department of Labor and Employment to eliminate an expansion of the state’s joint employer standard from its new revised wage rules. 

Outlook:  The battle over expansion of joint employer liability is far from over as efforts continue in various states to expand the definition.  At the federal level, even if the attorney generals’ challenge fails, survival of the new clarifications by DOL and the NLRB could hinge on the November election outcome.  This continuing uncertainty means large companies should continue to press franchisees and companies they contract with to ensure their compliance with federal and state laws.