USA| Final Rule announced under Fair Labor Standards Act; March 2020 Joint Employer Rule Rescinded

The U.S. Department of Labor has announced a Final rule on July 29, 2021, which shall rescind an earlier rule, Joint Employer Status under the Fair Labor Standards Act (FLSA), that came into effect in March 2020.

The Joint Employer Rescue Rule has been rescinded since Joint Employment meant the department considers two separate companies to be a worker’s employer for the same work. However, under Fair Labor Standards Act, an employee can have more than one employer for the work they perform. Repealing the Rule, the department ensures that more workers will receive minimum wage and overtime protections of the Fair Labor Standards Act.

Under FLSA, employers are required to pay employees at least the federal minimum wage for every hour they work and overtime compensation at not less than one-and-one-half times their regular rate of pay for every hour they work over 40 in a work week. A strong joint employer standard is critical because FLSA responsibilities and liability for worker protections do not apply to a business that does not meet the definition of employer.

The final rule becomes effective Sept. 28, 2021.

*Tanvi Singh, Editorial Assistant has reported this brief.

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