On January 21, 2020, Nick Reiter was quoted in Franchise Update regarding the U.S. Department of Labor's (DOL) makeover of the joint employer rule. According to the article, the new rule is expected to substantially narrow the joint employer definition and add clarity about the circumstances under which two parties will be considered joint employers.
"The new joint employer standards will be particularly important for franchisor-franchisee relationships, portfolio member companies, and employers that often rely upon staffing agency services," says Reiter. "Employers may want to consider how to modify their relevant service agreements to take advantage of the DOL's new joint employer rule."
The new rule is important for several reasons, says Reiter:
- A party's mere reservation of rights to supervise or control an employee's conditions of employment will no longer necessarily mean that party is a joint employer.
- Actual exercise of control for at least one of the DOL's factors will be required for a joint employer determination.
- Satisfaction of the fourth factor - maintaining an employee's employment records - will no longer be enough by itself to render a party a joint employer.