Labor Department Rolls Back “Joint Employer” Rule
Prior regulation hindered American economy
Franchise corporations, such as McDonald’s, were made legally responsible for workplace violations by their franchisees, even if the latter were legally independent businesses, the “joint employer” rule said. The theory had been that a corporation was a joint employer with the other company, even if the former only had “indirect control” over the latter company’s policies.
Trump Administration officials have been working to roll back that joint employer rule. On Sunday, the Labor Department issued an official rule that corporations were only liable when they had “direct control” over the other company’s policies.
"This final rule furthers President Trump’s successful, government-wide effort to address regulations that hinder the American economy and to promote economic growth,” said Labor Secretary Eugene Scalia. The rule will go into effect in 60 days. The department said the “indirect control” standard that had been employed was too vague.
- For major corporation franchisers and their franchisees as they are freed from the joint employer rule.
- For Secretary Eugene Scalia as he continues in his new headship at the Department of Labor.