The U.S. Department of Labor rescinded a joint employer rule and proposed a rule implementing the Executive Order on contractor minimum wage. A House of Representatives committee approved a bill designed to protect older job applicants and President Biden stated that “long COVID” is a disability.  

DOL Issues Final Rule Rescinding Joint Employer Rule 

The U.S. Department of Labor (DOL) released a final rule rescinding an earlier rule concerning joint employment that took effect in March 2020. DOL believes that the rule it rescinded contained a joint employment description that was contrary to the Fair Labor Standards Act (FLSA). DOL had issued a notice of proposed rulemaking on March 12, 2021, announcing their plan to rescind the joint employer rule.

The Labor Department noted that under the FLSA, employees can have more than one employer and for purposes of minimum wage and overtime requirements during a workweek, DOL may consider two separate organizations to be a worker’s employer for the same work. 

DOL cited the following example: “A joint employer relationship could occur where a hotel contracts with a staffing agency to provide cleaning staff, which the hotel directly controls. If the agency and the hotel are joint employers, they are both responsible for worker protections.” 

In 2016, during the Obama Administration, the Wage Hour Administrator issued a joint employment interpretation. The interpretation covered horizontal joint employment which exists “where an employee is separately employed by, and works separate hours in a workweek for, more than one employer, and the employers are sufficiently associated with or related to each other with respect to the employee such that they are joint employers.” 

Another example of the interpretation included vertical joint employment.  This exists where an employee has an employment relationship with one employer, such as a staffing agency and another employer is receiving the benefit of the employee’s work and “the economic realities show that [the employee] is economically dependent on, and thus employed by the other employer.” On June 7, 2017, under President Trump, DOL withdrew this 2016 interpretation. 

In March 2020, a revised joint employer rule went into effect. The revisions mostly concerned vertical joint employment. The rule established four factors that should be considered to determine if there is a vertical joint employment relationship. 

The four factors were whether the other employer: 

• Hires or fires the employee
• Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree
• Determines the employee’s rate and method of payment
• Maintains the employee’s employment records.

In September 2020, the U.S. District Court for the Southern District of New York in the case of New York v. Scalia, vacated the vertical joint employer rule finding that it violated the Administrative Procedure Act since it conflicted with the FLSA. This case is currently on appeal to the U.S. Court of Appeals for the Second Circuit. 

In finalizing the rescission of the rule that went into effect in March 2020, DOL stated that it will continue to consider legal and policy issues relating to FLSA joint employment before determining whether alternative regulatory or other guidance is appropriate. The DOL is expected to rely on the economic realities standard when examining vertical joint employment. The final rescission rule becomes effective on September 28, 2021. 

Labor Department Issues Proposed Rule on Contractor Minimum Wage

The U.S. Department of Labor issued a proposed rule establishing procedures to implement and enforce Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” signed by President Biden on April 27, 2021. 

The Executive Order would:

• Increase the minimum wage for those performing work on federal contracts to $15 per hour beginning Jan. 30, 2022.
• Continue to index the federal contract minimum wage in future years based on increases in the Consumer Price Index. 
• Eliminate the tipped minimum wage for federal contract workers by 2024.
• Ensure a $15 minimum wage for workers with disabilities performing work on federal contracts. 

According to the proposed rule, “Raising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory training costs.” 

Comments on the proposed rule are due by August 23 and can be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov or by mail to Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, US Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, DC 20210.

House Committee Approves Protecting Older Job Applicants

The House Education and Labor Committee approved the Protect Older Job Applicants Act of 2021 (H.R. 3992), which was introduced by Representative Sylvia Garcia (D-TX) along with several co-sponsors. 

This bill would amend the Age Discrimination in Employment Act (ADEA) to clarify that older applicants for employment are protected from discrimination. According to the sponsors, the 11th Circuit in the 2016 case of Villarreal v. R.J. Reynolds and the 7th Circuit in the 2019 decision in Kleber v. Care Fusion Corporation ruled that the ADEA only covers employees but not job applicants. This legislation would overturn those decisions. 

The bill needs to be considered next by the full House of Representatives. 

President Biden Calls “Long COVID” A Disability

In remarks commemorating the 31st anniversary of the American with Disabilities Act (ADA), President Biden noted that those with “long COVID” may have ongoing conditions that would constitute a disability. President Biden stated: “We’re bringing agencies together to make sure Americans with long COVID, who have a disability, have access to the rights and resources that are due under the disability law — which includes accommodations and services in the workplace, in school and our healthcare system so they can live their lives in dignity and get the support they need as they continue to navigate these challenges.”

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at [email protected].