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U.S. Secretary of Labor Withdraws Joint Employment, Independent Contractor Informal Guidance

On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. The joint employer doctrine refers to cases in which a business can be said to effectively control the workplace policies of another company, such as when a company subcontracts to another business. Until 2015, the department said the doctrine applied only to cases in which the company had “direct control” over the other’s workplace. In 2015, the department under then-Labor Secretary Tom Perez changed the standard to the much more ambiguous “indirect control.” Companies, particularly ones that engage in franchising, feared they could be held liable for all manner of violations at workplaces they didn’t directly oversee.
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