Congressman Tim Ryan Applauds Biden Administration for Rescinding Antiworker Rule
Washington, DC — Congressman Tim Ryan (OH- 13) released the following statement after the U.S. Department of Labor officially rescinded a rule that limited worker protections for contractors and franchise workers. The rule on joint-employment, which was enacted under the prior Administration, limited the scope of which businesses were considered joint-employers and therefore made it more difficult to hold companies liable for wage law violations. This left many contract and franchise workers with little recourse when employers violated the law and shortchanged their wages or overtime.
“Rescinding this anti-worker rule is going to help make sure all workers are paid at least the minimum wage and the overtime they are due. Workers are the true lifeblood of every business, and I won’t stand for allowing them to be shortchanged,” said Rep. Tim Ryan. “Every American worker deserves basic protections under the law and that doesn’t change just because they’re a contractor or franchise worker. Considering those workers under joint employment is part of our longstanding federal labor laws and this basic rule change reaffirms that.”
The U.S. Department of Labor yesterday announced a final rule to rescind an earlier rule, “Joint Employer Status under the Fair Labor Standards Act” that took effect in March 2020. By rescinding that rule, the Department will ensure more workers receive minimum wage and overtime protections of the Fair Labor Standards Act.
The rescinded rule included a description of joint employment contrary to statutory language and Congressional intent. The rule also failed to take into account the department’s prior joint employment guidance. The U.S. District Court for the Southern District of New York vacated most of the rule in 2020.
Under the FLSA, an employee can have more than one employer for the work they perform. Joint employment applies when – for the purposes of minimum wage and overtime requirements – the department considers two separate companies to be a worker’s employer for the same work. For 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.
A strong joint employer standard is critical because FLSA responsibilities and liability for worker protections do not apply to a business that does not meet the definition of employer.
The final rule becomes effective September 28, 2021.