On June 7, 2017 the Secretary of Labor, Alexander Acosta, announced that the US Department of Labor (DOL) was withdrawing its 2015 and 2016 guidance on joint employment and independent contractors. The Obama-era guidance expanded how joint employment was defined to include employers that have indirect or potential control over the terms and conditions of employment, as we previously reported. By moving away from this guidance, the DOL returns to the previous direct control standard. The move also rescinds an Interpretation Letter stating the DOL would broadly define “employee” under the Fair Labor Standards Act (FLSA) and that most workers would be considered “employees” for purposes of that Act, previously reported in 2015. The press release issued by the DOL made clear that the withdrawal of the 2015 and 2016 guidance does not change legal obligations for employers under the FLSA and that the agency would continue to “fully and fairly enforce all laws within its jurisdiction.”
While employers may have more breathing room under the FLSA, the National Labor Relations Board (NLRB) still applies the expanded joint employer definition. The NLRB’s new joint employer standard is currently being appealed in the District of Columbia Circuit Court of Appeals. Regardless of the outcome at this level, the decision will likely be appealed to the U.S. Supreme Court. Until there is a final decision as to the expanded joint employer definition, employers should be aware that the NLRB will continue to enforce the broadened standard.