U.S. Department Of Labor Delays Joint Employer Rule By One Week

The U.S. Department of Labor (DOL) announced last week that it will delay the effective date of its final joint employer rule from September 28, 2021 to October 5, 2021. The agency did not give a reason for the one-week delay.

As a reminder, in July 2021 the DOL rescinded a Trump administration’s joint employer rule. The Biden administration rule says horizontal joint employment exists where an employee is separately employed by and works separate hours in a workweek for more than one employer, and the employers are “sufficiently associated with or related to each other with respect to the employee.”

Under the Trump administration rule, the DOL would have considered four factors to determine whether a company is a joint employer. Specifically, it would have looked at whether the company:

• Hires and fires the employee;
• Supervises and controls employees’ work schedules or conditions of employment to a substantial degree;
• Determines employees’ rate and method of payment; and
• Obtains employment records.

In May, MSCI joined with dozens of other businesses and trade organizations to support the legislation that would make clear that a business may be considered a joint employer in relation to an employee only if such employer directly, actually, and immediately exercises significant control over the essential terms and conditions of employment. The letter is available here.

MSCI will continue to support this legislation and to oppose the Biden administration rule, which could impose significant new costs on businesses.