February 27, 2020
Attorneys general from 17 states and the District of Columbia filed a lawsuit to stop the US Department of Labor’s new joint-employer rule. The suit was announced Wednesday.
“The new rule, which would result in lower wages and additional wage theft targeting lower- and middle-income workers, demonstrates that the Trump Administration does not care about the hardworking individuals that help this country run,” New York Attorney General Letitia James said in a statement.
The Department of Labor announced the final rule last month, and it’s set to take effect March 16. It includes a four-factor test for determining joint-employer status where an employee performs work for one employer and that work benefits another. It’s separate from a joint-employer final rule discussed this week by the National Labor Relations Board.
In the lawsuit announced yesterday, the attorneys general argued companies have increasingly outsourced employment of workers and that third-party employers are less stable and subject to less scrutiny. As a result, they are more likely to violate wage and hour laws, according to the attorneys general.
“Here in New Jersey, we have a strong stake in protecting the rights of workers and guaranteeing them redress for wage-and-hour violations. That is why it’s important for us to be part of today’s lawsuit,” New Jersey Attorney General Gurbir Grewal said.
The joint-employer standard determines when more than one employer is responsible under the Fair Labor Standards Act because both exert sufficient influence over a worker’s employment.
“Under the new administration rule, corporations can only be categorized as ‘joint employers’ – and therefore only be held liable for the actions of their subcontractors, franchisees or third-party managers – if it can be shown they have ‘direct control’ over the other companies’ policies,” according to the New Jersey Attorney General’s Office.