U.S. Labor Department moves to ease companies' liability for franchisee wage violations

[Eugene]

Source: Reuters

BUSINESS NEWS APRIL 1, 2019 / 12:30 PM / UPDATED 8 HOURS AGO

U.S. Labor Department moves to ease companies' liability for franchisee wage violations

Daniel Wiessner
3 MIN READ

(Reuters) - The U.S. Department of Labor on Monday issued a proposal that would make it more difficult to prove companies are liable for the wage law violations of their contractors or franchisees, a top priority for business groups.

If adopted, the rule would likely help fast-food companies and other franchisors who have been sued by workers in recent years for wage-law violations by franchisees.

The department in 2017 had already repudiated legal guidance issued by the Obama administration that had expanded the circumstances in which a company could be considered a so-called joint employer under the federal Fair Labor Standards Act (FLSA).

Labor Secretary Alexander Acosta in a statement said Monday’s proposal would reduce litigation under the FLSA and provide clarity to businesses and courts. The FLSA mandates that workers be paid the minimum wage and overtime, among other requirements.

Publication of the rule kicked off a 60-day public comment period.

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Read more: https://www.reuters.com/article/us-usa-labor/u-s-labor-department-moves-to-ease-companies-liability-for-franchisee-wage-violations-idUSKCN1RD2UK

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