The Trump administration announced last week that it has loosened the federal government’s “joint employer” rule for businesses that use outside contractors for various jobs. According to a Los Angeles Times report and analysis, the change will make it more difficult for victims of wage theft by staffing agencies and subcontractors to sue the companies where the violations occur. The rule also frees franchising companies from the responsibility for working conditions at their franchises.
California Has Stronger Laws
This new policy essentially overturned a 2016 Obama administration rule that allowed workers to hold companies accountable for stealing their wages or shortchanging them. The Trump administration’s policy has received praise from business organizations, but it is understandable why workers’ rights organizations oppose it. However, California officials say this new rule will not affect California businesses because the state’s laws protect workers. The federal Fair Labor Standards Act, which gave rise to the Trump rule, does not preempt California’s labor laws.
Under California laws, the definition of “an employer” is broad enough to reach any individual or entity that directly or indirectly employs or exercises control over an employee’s wages, hours, and working conditions, officials told the Times. California has the strongest wage-and-hour laws. The state also has a higher minimum wage and a lower overtime threshold than federal law.
When it comes to franchises, the Trump administration’s joint employer law doesn’t affect California because the state’s jurisdiction over franchises was limited by an October 2019 court decision where 1,400 workers sued McDonald’s alleging that its franchisees denied them overtime, meal and rest breaks. In that case, the state’s appellate court ruled that the company was not a joint employer responsible for franchisee violations under California law.
Fighting for Workers’ Rights
While the new rule may not affect California, it could have widespread effects across the country at a time when large corporations such as McDonald’s and Amazon have faced lawsuits that argue that the companies should be held accountable along with franchisees for wage theft and overtime violations. The new policy takes effect on March 16.
As California class action lawyers who represent the rights of workers, we are saddened to note that the Trump administration’s new rule is going to adversely affect workers nationwide especially as they try to assert their rights and recover wages that were stolen from them. We are grateful for strong wage and hour laws in California and will continue to fight for workers’ rights and hold corporations trying to shortchange them accountable.
Source: https://www.latimes.com/business/story/2020-01-14/la-fi-california-joint-employer-labor-franchise-rule
Ian Silvers
Ian Silvers is a partner and trial lawyer at Bisnar Chase, specializing in wage and hour violations and workplace violation class actions. He is dedicated to supporting workers and fighting for employee rights in California.