Bloomberg Law
Sept. 12, 2018, 7:00 PMUpdated: Sept. 12, 2018, 9:01 PM

Labor Department to Clarify Franchise Rule, Acosta Says (1)

Jaclyn Diaz
Jaclyn Diaz

The Labor Department is “giving serious consideration to writing a rule” to clarify when a franchise is liable for acts by its franchisees, Secretary Alexander Acosta told a hospitality industry group Sept. 12.

“I want to let you know that we’re in the process of considering how to provide a more clear and more permanent approach to joint employer,” Acosta said to applause. “It’s so important to know the rules of the road” when it comes to joint employer liability, he said.

The DOL has been working on an initiative to restrict situations in which one business can be liable for wage and hour violations of a related company’s employees. The National Labor Relations Board is currently working on a proposal expected to limit the situations in which one business can be held responsible for unfair labor practices against a related company.

The efforts are a response by both agencies to undo joint employment rules imposed during the Obama administration. The business community has been critical of the Obama-era approach that they believe made businesses responsible for workers that aren’t theirs.

“There is something that is very valuable about going through the rulemaking process,” Acosta said, making clear the agency doesn’t plan to pursue administrative interpretations or guidance, which aren’t legally binding like rulemaking. Acosta was speaking in Washington to members of the American Hotel & Lodging Association and the Asian American Hotel Owners Association.

More H-2B Changes

Acosta also touched on the department’s plans to automate the processing of H-2B visas. The H-2B temporary visa program is supposed to help companies with seasonal business surges.

The DOL has been considering tweaks to the H-2B program in recent days. A proposed rule to “modernize recruitment” of H-2B workers was submitted to the Office of Management and Budget Sept. 7. This latest announcement also follows a recently announced compliance assistance initiative program for employers that use the H-2B program. The DOL announced plans to combine information and compliance assistance with government investigations of landscaping industry employers that hire workers on the visas. It follows a similar initiative for the hotel industry launched last week.

Congress hasn’t addressed needed limits to visas provided through the H-2B program and it needs to make changes to the program, Acosta said.

The DOL’s work processing those visas “is flawed” and has remained unchanged for “decades,” he said.

The department still prints and mails out labor certification documents. It is limited to printing 200 certification documents a day because of current technology, Acosta said. By taking more of the process online, which Acosta has instructed staff to begin doing, the DOL can make the process easily accessible for businesses, he said.

That is set to be completed within the next few months, he said.

(Updated with additional reporting.)

To contact the reporter on this story: Jaclyn Diaz in Washington at

To contact the editor responsible for this story: Peggy Aulino at