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New Joint Employer Rule Exposes More Workers to Wage Theft

Hurts the more than 3 million temp and staffing workers, and millions of other workers in subcontracted jobs

The following is the statement from the National Employment Law Project regarding the new joint employer rule announced by the DOL and the negative impact it will have on a large number of American workers:

“On Sunday, the U.S. Department of Labor announced a final rule that interprets the ‘joint employment’ standard in a way that makes it easier for corporations to cheat their workers and look the other way when workplace violations occur. 

“The DOL’s final interpretation dramatically and improperly narrows companies’ joint responsibility for respecting fair pay and child labor laws, exposing millions of workers to wage theft. 

“In issuing this rule, the DOL ignored the clear language of the Fair Labor Standards Act, decades of court rulings, including by the U.S. Supreme Court, and comments from numerous states and worker advocates. 

“When a company ‘calls the shots’ in a workplace, that company should be accountable for how the workers there are treated-no matter what the company calls the workers or how it classifies them. So when a company decides to contract out work to a temp or staffing firm or other labor subcontractor, it should share responsibility for the workers. 

“Too many employers use temp agencies and subcontractors to try to duck responsibility for wage theft. That’s why, for well over a century, the law has recognized the idea of joint employment: companies that share control over working conditions may also share responsibility for workers’ rights. 

“This action hurts the very workers who need the law’s protection the most: the more than three million temp and staffing workers, and millions of other workers in subcontracted jobs, including those in agriculture, janitorial, construction, and warehousing. This rule will disproportionately harm Black and Latinx workers who largely comprise the workers doing these jobs, which already pay less than non-outsourced jobs in the same sector.  

“This action also hurts small businesses. Large corporations that outsource jobs will more easily get off the hook for workplace violations, while the typically smaller, poorly capitalized local businesses that provide the workers will bear all the liability. This leaves the small businesses, which are already at the mercy of terms and conditions foisted upon them by larger corporations, exposed to bankruptcy-and leaves the workers in danger of having no remedy at all. 

Once again, the Trump Administration has given a gift to corporations that can simply insert a temp or staffing agency into their businesses and walk away from fair pay and child labor violations, leaving smaller businesses on the hook and too often leaving employees empty-handed with no protections. 

“In today’s economy, we should be looking for ways to increase workers’ pay and economic security, not lay the groundwork for more sweatshops. The Trump Administration has once again rigged the rules in favor of corporations against working people.”  

                                                           

According to the DOL, to determine whether a worker is jointly employed by two businesses, it will consider four factors. Does the potential second employer:

• Have the power to hire or fire the employee?

• Supervise and control the employee’s work schedule or conditions?

• Determine the employee’s pay rate and method of payment?

• Maintain the worker’s employment records?

Meeting a single factor would not likely create a joint-employment finding, nor would holding the right to control a worker’s schedule or conditions without actually asserting that control.

                                                         

More Resources on Joint Employer:

Report: Who’s the Boss: Restoring Accountability for Labor Standards in Outsourced Work

Poll: Voters See ‘Contracting Out’ as Serious Problem for America’s Workers and Economy

For more information on the Trump Administration’s rules, policies, and laws affecting workers, visit www.nelp.org/tracker

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter at @NelpNews.