NSFW? Not Quite. But 18 States Say DOL’s New Joint Employment Rule Is Inappropriate.

Zippy Michigan

Zippy sunbathes in the nude.

Some things sound inappropriate, but they’re not. For example, I sometimes post naked pictures on my blog. But only of my dog. She’s immodest and doesn’t seem to mind. (Her fur coat doesn’t count.) So, you see, that’s not inappropriate.

What about the DOL’s new joint employment test, which went into effect in March? Was that inappropriate? Eighteen Democratic state attorneys general seem to think so, and they’ve filed a federal lawsuit to try to undo the rule. For those of you keeping score at home, they claim the new rule violates the Administrative Procedures Act and is not consistent with the Fair Labor Standards Act.

Last week, a federal judge in New York rejected the DOL’s motion to dismiss the lawsuit, meaning the case moves forward. The DOL argued that the states lacked standing to challenge the new rule. Lack of standing means they can’t sue because they’re not harmed by the new rule.

But the judge found that the states “plausibly alleged” that they have standing to sue. He noted that the new rule could reduce the total amount of wages paid to employees in their states, which could lead to a reduction in tax revenues. The loss of tax revenues and the anticipated increased expense in enforcing state wage and hour laws would be enough. The states can proceed.

The ruling does not address whether the lawsuit has any merit, just that it may proceed.

While no one would claim the new rule is NSFW, these states argue that the content of the new rule and the way it was passed was inappropriate. But like the naked photo above, you need to see the full picture before drawing any conclusions about what’s proper and what’s not. 

For now, the DOL’s new rule remains in effect.  That means it’s more difficult to establish joint employment than it was before. It’s also difficult, by the way, to get a dog to wear a hat. But we did it. And Zippy looks ready for college football season. 

© 2020 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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