© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 127 Hour Division (WHD) under the Obama Administration issued an Administrator’s Interpretation (the Guidance) that described in detail the WHD’s opinion of the criteria for determining whether two or more businesses are joint employers and therefore may be held jointly and severally responsible for fulfilling minimum wage, overtime, and other obligations under the FLSA. As persuasive authority, the Guidance called for the courts and WHD investigators to apply an “expansive” definition when deciding whether two or more businesses are responsible for a single employee’s pay and when a business employs a worker who is more clearly employed by a third party. However, in June 2017, the WHD under the Trump Administration withdrew the Guidance. It published a new rule regarding joint employer status on January 16, 2020, and that rule became effective on March 16, 2020. The DOL’s 2020 rule (1) specifies that when an employee performs work for the employer that simultaneously benefits another person, that person will be considered a joint employer when that person is acting directly or indirectly in the interest of the employer in relation to the employee; (2) adopts the Bonnette factors to determine when a person is acting directly or indirectly in the interest of an employer in relation to the employee; (3) clarifies that an employee’s “economic dependence” on a potential joint employer does not determine whether it is a joint employer; and (4) specifies that certain contractual agreements and business practices, such as an employer’s franchisor or similar business model, do not make joint employer status more or less likely.741 In response, the WHD under the Biden Administration published a new rule on July 31, 2021 to rescind the rule enacted under the Trump Administration.742 This rule became effective on September 30, 2021. As of the date of this publication, it is unclear what steps the second Trump Administration will take with respect to joint employment. The DOL’s fluctuating position is a reminder that the determination of joint employer status remains a hot-button issue. Further, it is not clear whether Massachusetts courts will consider the DOL’s shifting approach to joint employment under the FLSA when analyzing the issue under the state wage laws. Employers should be cautious when engaging the services of another’s employees and understand the possibility of joint employment under a more expansive test. more essential employment terms of an another entity’s employees. See https://www.federalregister.gov/documents/2023/10/27 /2023-23573/standard-for-determining-joint-employer-status (last visited Mar. 6, 2025). That rule went into effect on December 26, 2023. On March 8, 2024, the U.S. District Court for the Eastern District of Texas struck down the 2023 Rule, finding that it was both unlawfully broad and arbitrary and capricious. As a result, the 2020 Rule remains in place – at least as of the time of printing this publication. In April 2024, Congress passed a resolution to overturn the NLRB’s 2023 Rule, but President Biden vetoed that resolution on May 3, 2024. 741 See https://www.federalregister.gov/documents/2020/01/16/2019-28343/joint-employer-status-under-the-fair-labor-standardsact (last visited Mar. 6, 2025) 742 See https://www.federalregister.gov/documents/2021/07/30/2021-15316/rescission-of-joint-employer-status-under-the-fairlabor-standards-act-rule (last visited Mar. 6, 2025).
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