Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in the Bloomberg BNA Daily Labor Report, in “DOL to Narrow Franchiser, Staffing Wage Liability,” by Jaclyn Diaz and Chris Opfer. (Read the full version – subscription required.)

Following is an excerpt:

The Labor Department proposed a new regulation April 1 to limit shared wage and hour liability for companies in franchise and staffing arrangements.

The proposed rule narrows the situations in which businesses can be considered “joint employers” of a group of workers. The question often comes up when workers at a franchise restaurant try to sue the franchiser for unpaid minimum wages and overtime. It’s also been at the center of debates over whether companies should be required to bargain with workers provided by a staffing firm. …

Rulemaking Authority a ‘Moving Target’

The move comes as the National Labor Relations Board is working on its own regulation to limit joint employer liability for collective bargaining and unfair labor practices. The board generally would require a company to exercise direct control over workers to be considered their joint employer.

The DOL regulation is considered an interpretive rule because Congress didn’t directly give the department the authority to define joint employment. Some say that means the rule isn’t legally binding and will have less persuasive value in court. It may also be subject to legal challenge.

The department’s rulemaking authority is a “moving target,” Paul DeCamp, who ran the DOL’s Wage and Hour Division for part of the George W. Bush administration, told Bloomberg Law. The Supreme Court is expected to reconsider some of the deference that judges give agency regulations and interpretations of those regulations. But DeCamp said the new regulation will have at least some weight in court.

“There are plenty of courts that have not hesitated to afford substantial deference, even with the absence of an expressed delegation of rulemaking authority,” he said. …

Debate Continues

The department offered some hypothetical examples to show how the new test would apply in certain staffing arrangements. …

DeCamp said those examples will likely spark some “reaction” during the public comment period, which begins once the agency publishes the proposal in the Federal Register.

“It’s often easy for parties to debate these regulations as more or less hypothetical, but the rubber meets the road when you provide the specific fact scenarios,” he said.


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