In a statement, the agency said, “Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.”
Additionally, the Labor Dept.’s action does not impact the National Labor Relations Board’s interpretation of joint employer, which is under review in federal court. The NLRB’s standard is legally binding.
Still, industry groups like the National Restaurant Association applauded the move. Shannon Meade, director of labor and workforce policy at the NRA, said the move was “a positive step in the right direction,” and that the NRA will “continue to work with the Department of Labor and Congress on the previous administration’s controversial joint employer standard.”
The NLRB interpretation of the joint employer standard means that employers can be held jointly liable for labor law and wage violations committed by its franchisees. Stakeholders in the foodservice industry argue that making franchisors liable for the actions of their franchisees completely changes the franchisor-franchisee relationship and could lead to less entrepreneurship and job creation in the industry.
The NLRB classified Oakbrook, Illinois-based McDonald’s Corp. as a joint employer, a ruling the quick-service chain is challenging in federal court.