Stricter Rules for Defining Joint Employers in Labor Law.
This bill changes how federal law defines a "joint employer." It ensures that a company is only legally responsible for the employees of another business if it directly and immediately controls key aspects of their work, such as hiring, pay, or daily supervision. This clarification aims to protect local businesses and franchises by limiting when larger parent companies or contractors can be held liable for the labor practices of their affiliates.
Key points
A company must now directly control essential job terms (like pay, hiring, or daily tasks) to be considered a joint employer under federal labor laws.
The change affects both the National Labor Relations Act (union rights) and the Fair Labor Standards Act (wages and hours).
This makes it harder to hold parent companies or franchisors legally responsible for the employment decisions made by their franchisees or contractors.
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