Employer Guide to Key DOL Proposals on Latest Regulatory Agenda The US Department of Labor (DOL) just released its latest semiannual regulatory agenda, and employers should tune in. The agency’s current proposals include high-priority actions related to joint employer determinations, independent contractor classification, minimum wage and overtime exemptions, workplace safety, and more. Secretary of Labor Lori Chavez-DeRemer said that the DOL’s “bold” agenda, which was unveiled on September 4, “focuses on flexibility, transparency, and common-sense reform.” Here’s your employer guide to some of the agency’s key proposals. 1. Joint Employer Status Under the FLSA (RIN 1235-AA48) The DOL will revisit the standard for determining joint employer liability under the Fair Labor Standards Act (FLSA), which has been a hot-button issue for years now. The agency plans to issue a new proposed rule in December that would guide enforcement and “help promote greater uniformity among court decisions nationwide.” While the details of this proposal remain to be seen, we think the DOL will likely push for a rule that reflects the evolving nature of flexible work arrangements – much like the business-friendly final joint employer rule issued by the agency during the first Trump administration. The 2020 rule was short- lived, as it was (essentially) struck down by a NY federal judge roughly six months after it took effect and then rescinded altogether by the Biden DOL in 2021. Here’s a snapshot of how these changing standards have impacted employers: • The DOL’s 2020 final rule narrowed the scope of joint employment liability for wage and hour matters by requiring businesses to exercise “actual” control – such as hiring, firing, supervising, setting pay rates, and maintaining employment records – in order to share liability. Mere theoretical control was not enough to meet the standard. You can read more about the four- factor test on our Insights page. • The Biden administration’s rescission of the 2020 rule ushered in the return of a broad definition of joint employment for FLSA purposes and a standard that focuses on whether an employer “retains the right to control” essential terms and conditions of employment – even if that right is not actually exercised. This expansive approach has major implications across industries, potentially exposing many more businesses to wage and hour liability. Note: The National Labor Relations Board and other federal agencies may apply different joint employer tests in other contexts. Notably, the NLRB is not even included as an agency in the latest regulatory agenda, which is governmentwide. 2. Independent Contractor Classification Under the FLSA (RIN 1235-AA46) The DOL intends to rescind a 2024 final rule that made it harder for businesses to classify workers as independent contractors. This comes as no surprise, as the agency announced in May that it would no longer enforce the Biden-era rule (which remains under challenge in five separate lawsuits that are currently stayed) and instead would be relying for the time being on earlier enforcement guidelines. The DOL is now considering how it will proceed with respect to independent contractor classification under the FLSA. While the agency has not yet provided any details on such plans (only that a proposal
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