Attorney General Josh Shapiro announced that Pennsylvania led a 19-state coalition to oppose a U.S. Department of Labor’s proposal that could expose millions of American workers to labor law violations and leave them without the ability to sue employers who commit those violations. The comment letter challenges the new rule that would complicate how states enforce labor laws and leave millions of workers vulnerable to labor violations.
In the letter, sent to U.S. Department of Labor (USDOL) Secretary Alexander Acosta, the attorneys general challenge USDOL’s proposed change to joint employer status under the Fair Labor Standards Act (FLSA), an interpretation that governs the liability of an employer who shares with another employer control over the terms and conditions of workers’ employment.
The joint employer rule protects workers whose employment and working conditions are controlled by more than one company. For example, a worker at a fast food chain can currently be considered an employee of both the locally-owned franchise and the national corporation. Or, a person who works at a warehouse through a temp agency can be considered an employee of both the warehouse and the temp agency. USDOL’s new interpretation would make it easier for employers to pass the buck and harder for workers to hold bad actors accountable.
“With this proposed change to Joint Employer Status, the U.S. Department of Labor risks undermining the very purpose of the Fair Labor Standards Act—to protect our workers,” said Attorney General Josh Shapiro. “Our labor laws must be consistent with the changing nature of our economy in order to adequately protect workers, and we must be able to hold employers accountable when they are not treating their workers fairly. I’m proud to stand with my colleague attorneys general on the side of millions of hardworking Americans who could be negatively affected if this rule goes into effect.”
Under USDOL’s proposed rule, joint employment would be determined by whether an employer hires or fires the employee, supervises and controls the employee’s schedule and working conditions, determines the employee’s rate and method of payment, and maintains the employee’s records. This means that an employer could avoid liability because they outsource these decisions, even though they have the final say.
According to the attorneys general, this proposal is inconsistent with the purpose of the FLSA – to protect workers – and ignores more than 30 years of private sector development during which the economy and the workplace have changed.
Further, the attorneys general write that DOL’s proposed rule does not reflect today’s workplace relationships, where businesses increasingly share employees using third-party management companies, independent contractors, staffing agencies, or other labor providers. By narrowing the scope of the joint employment, the DOL’s change will leave millions of workers vulnerable to unchecked violations of federal and state labor laws.
If the federal standard fails to encompass companies that pay for subcontracted employees while also controlling the terms of employment, the attorneys general contend that gaps in legal compliance will inevitably increase, leaving workers at greater risk of exploitation.
The comment letter was co-led by the attorneys general from Pennsylvania, Massachusetts, and New York, and joined by California, Connecticut, Delaware, Washington D.C., Illinois, Maryland, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.