Gavel on book The International Franchise Association (IFA) praised the new rule as a “return to a simple, clear, and thoughtful joint-employer standard.”

The U.S. Labor Department under President Trump is changing course from the Obama administration and revising guidelines to determine joint-employer status under the Fair Labor Standards Act – “in order to promote certainty for employers and employees, reduce litigation, promote greater uniformity among court decisions and encourage innovation in the economy.”

The nonbinding rule, which takes effect March 15, is intended to give more clarity when an entity can be considered a joint-employer that could be sued for labor violations including requirements on minimum wage and overtime pay. The Labor Department’s joint-employer status guidelines under Obama were much more expansive, making it easier for workers to sue more than one entity for labor violations, like for example, both the McDonald’s Corp. and separately owned franchises that own McDonald’s restaurants.

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Katie Kuehner-Hebert

Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.

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