Pending ‘Joint Employer’ Rule Raises Questions of DOL Authority

The Labor Department hasn’t yet issued a new regulation on the controversial issue of shared employer liability in franchise and staffing arrangements, but there are already questions in some quarters about how well the policy change could hold up in court.

The DOL plans to update current regulation by the end of the year. The policy would govern “joint employer liability,” or when multiple businesses share legal responsibility for minimum wage and overtime violations by their partners.

Some lawyers say the department doesn’t have the power under the language of the Fair Labor Standards Act to make a rule legally ...