New Proposed Rule re Joint Employer Liability

If you work at McDonald’s or any other franchise and have a wage and hour claim (i.e. you didn’t receive the overtime compensation you were entitled to), who do you sue?  The franchise you work for down the street, or the corporate office?  In 2015, the joint-employer standard was clarified so that the corporate office may also be held responsible for local franchisee violations of the FLSA violations.  This means if the franchise you worked for required you put in time “off the clock” and didn’t compensate you, the corporation may be held accountable.  However, a new proposed rule seeks to change this.

Under the proposed rule, an employer may be considered a joint employer of another employer’s employees only if “it possesses and exercises substantial, direct, and immediate control over the essential terms and conditions of employment in a manner that is not limited and routine.” Indirect influence and contractual reservations of authority will no longer be sufficient to establish a joint-employer relationship.

This means that the corporate entity will only be held responsible if it is substantially involved in the operations of the franchise, such as setting the schedule, determining who to hire and fire, etc.  As such, it will be less likely to be on the hook for wage violations such as the failure to pay overtime or minimum wage as is required by the Fair Labor Standards Act (FLSA).

The comment period runs until mid-November.  Regardless of whether the rule is adopted, the law remains the same.  All employees must be paid at least minimum wage and non-exempt employees are entitled to overtime pay for time worked in excess of 40-hours in any work week.  If you believe your employer has violated any of these wage and hour provisions, an experienced Atlanta wage and hour attorney can assist you and help you recover the wages that you are rightfully entitled to.

For more information please contact the experienced Georgia wage and hour lawyers at Buckley Bala Wilson Mew LLP for an immediate case evaluation.