Employment expert Rob Wilson provides commentary on this new ruling and its expected impact on American business owners
In January, the Department of Labor clarified long-standing workplace disputes regarding joint-employer liability. In new provisions to the Fair Labor Standards Act (FLSA), the DOL has finalized regulations regarding an employee’s ability to consider franchisors to be joint employers and therefore liable for alleged workplace wrongdoings at franchise locations.
“The Department of Labor’s ruling was published in the Federal Register on Jan. 16, and it will go into practice 60 days after this publication date,” says Rob Wilson, human resources expert and President of Employco USA, a national employment solutions firm. “In part, their new provisions have clarified under what circumstances a franchisor can be considered a joint employer of a franchisee employee.”
Franchisors should be satisfied with these new clarifications to the Fair Labor Standards Act (FLSA), says Wilson.
“Franchisors have long taken issue with being labeled a joint employer when it comes to being held responsible for the management of franchisee’s employees, especially as it relates to issues like wages, overtime, and more,” says Wilson. “But under this new DOL ruling, a company can only be considered a joint employer if they meet 4 specific requirements.”
Wilson explains these requirements, saying, “An employee will now only be able to list a company as a joint employer in an employment claim if the company in question is responsible for hiring or terminating employees, for setting employees’ wages, for managing/creating employees’ work schedule, and for maintaining employee records, including disciplinary write-ups and other human resource information.”
If the company does not meet all four of these requirements, they cannot be considered a joint employer.
“In other words, a Burger King employee of a Chicago Burger King cannot sue Burger King as a whole for any employment complaints, as the corporation does not hire, fire, pay or otherwise manage the employees of the Chicago Burger King location in question,” says Wilson.
For more on this topic, please contact Rob Wilson at rwilson@thewilsoncompanies.com.