Key Obama Workplace Policy on Chopping Block at Labor Dept.

The Labor Department is quietly moving to undo a central Obama-era labor policy that made companies more likely to be liable when staffing firms or franchisees don’t pay minimum wages and overtime.

A small group of political hires at the DOL is working to update the department’s approach to “joint employer” liability, sources familiar with the situation tell Bloomberg Law. The department plans to restrict the scenarios in which one business is legally responsible for wage-and-hour violations by a contractually related company.

The issue has been hotly debated in courtrooms and the halls of Congress in recent years, sparked largely ...