Department of Labor Withdraws Obama-era Guidance on Joint Employer Status

Picture of US Department of Labor signOn June 7, US Labor Secretary Alexander Acosta announced that his department was withdrawing the Obama Administration’s informal guidance on joint employment.

“The rollback is a step in the right direction,” said Shannon Meade, the National Restaurant Association’s director of labor and workforce policy.

In a statement issued by AH&LA, Brian Crawford, VP of government affairs for AH&LA, said “with three out of every five lodging businesses considered small businesses and so many flourishing under the franchise model, it is critical that these employers have clarity and certainty as to who they employ and for whom they are liable under the law.”

Operators, however, should continue to be mindful of avoiding the exercise of indirect control both in franchising and outsourcing contexts.

The DOL news release cautioned that employers’ legal responsibilities remain the same, and it said that it would “continue to fully and fairly enforce all laws within its jurisdiction.” It remains to be seen whether the agency’s principal enforcement priorities will shift away from matters of joint-employment or independent-contractorship. In the meantime, operators should continue to make sure operations take into account all applicable, longstanding independent-contractor and joint-employment principles.

As Dana Kravetz, managing partner at law firm Michelman & Robinson, recently told Hotel News Now, “This remains a fertile ground for plaintiffs’ attorneys, absent clear direction from the courts returning the standard to that of actual control.”