01/13/2020

Labor Department Replaces Obama-era ‘Joint Employer’ Standard

Rule narrows whether businesses liable for overtime, minimum wage

The U.S. Labor Department issued a final rule Sunday that clarifies when a worker is employed by more than one company, an issue that affects franchise businesses such as McDonald’s and firms that have outsourced services such as cleaning and maintenance.

The rule, first proposed last spring, replaces an Obama administration policy that potentially made more businesses liable for failures by franchisees or contractors to pay overtime or minimum wages.

The issue has taken on greater importance in recent years as more Americans work for temp firms, contractors and franchises. By some estimates, roughly 14 million Americans are in such “alternative work arrangements.”

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