Proposed DOL Rule Clarifies Joint Employment Standards for FLSA, FMLA Purposes

The DOL has proposed a new rule offering a test for determining whether employers are jointly responsible for obligations under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA) and the Migrant and Seasonal Agricultural Worker Protection Act (MWPA). The DOL Proposal introduces a four-factor test. The test focuses on whether the employer (1) has power to hire or fire employees, (2) exercises significant control and supervision over the employee's schedules or working conditions, (3) controls the rate and method of employee pay, and (4) maintains employment records. Where these factors lean toward one direction, the DOL provides that there is a "substantial likelihood" that joint employment either exists or does not. If all factors don't lean in one direction, additional relevant factors can be weighed. The test is particularly relevant for employers who use staffing agencies, subcontractors and other third-party arrangements. For more information on the rules governing FMLA, visit Tax Facts Online. See Q 3640.3.