California Attorney General Becerra Joins Multistate Coalition Criticizing Harmful Changes to Joint Employment Standards

SACRAMENTO, CA (STL.News) – California Attorney General Xavier Becerra yesterday joined a multi state coalition opposing the Trump Administration’s proposed rule that would severely narrow joint employer liability under the Federal Labor Standards Act (FLSA).  In a comment letter, the Attorneys General argue that the U.S. Department of Labor’s (DOL) proposed rule would make labor law enforcement more difficult and could result in less accountability for indirect employers who nevertheless control working conditions affecting millions of vulnerable workers across the country.

“Our labor laws should enforce protections, not create loopholes for bad actors who disregard them,” said Attorney General Becerra.  “Under this proposed rule, those who set the conditions of employment for workers would be able to escape their obligations to ensure these workers receive the wages they’re owed.  How is that good for anyone but the bad actors profiting at American workers’ expense?  Together with states across the country, we’re urging the Trump Administration to withdraw this irresponsible proposal.”

DOL’s proposed rule would significantly narrow the circumstances in which an entity that exercised economic, contractual, or other types of control over workers could be held legally accountable for federal labor law violations.  Selectively drawing from the Ninth Circuit court decision in Bonnette v. Cal. Health and Welfare Agency, DOL’s proposed rule would utilize just four factors for determining when an entity has responsibilities as a joint employer.  However, unlike the Bonnette decision, which offers the factors as guidelines as part of a broader inquiry considering the “circumstance of the whole activity,” the proposed rule would apply these factors rigidly to determine joint employment in all cases.  The narrow definition of joint employer proposed by DOL is particularly problematic in the current workplace environment, where client firms utilize staffing companies or subcontractors, or rely on the misclassification of employees as contractors in order to escape accountability to workers who they effectively direct.  Constraining the definition will exacerbate the existing lack of accountability and render FLSA enforcement further out of step with the realities of the modern workplace.  Separately, the proposed rule would likely violate the federal Administrative Procedure Act.  DOL has failed to provide a satisfactory justification for the proposed change, in contravention of judicial precedent, and offers no evidence to support its rationale.

Attorney General Becerra is dedicated to defending the rights of workers in California and across the country.  In January, Attorney General Becerra joined a similar multi-state comment letter opposing a National Labor Relations Board proposal that would diminish protections for millions of workers.  Last month, Attorney General Becerra led a multi-state lawsuit against the Trump Administration’s final rule undermining collective bargaining rights for Medicaid in-home care workers nationwide.  This spring, the California Department of Justice, as part of a multi-state effort, entered into agreements with major fast food companies operating around the country prohibiting them from including provisions in contracts that make it more difficult for employees to seek better pay and benefits at competing franchises.

In submitting yesterday’s comment letter, Attorney General Becerra joined the Attorneys General of Massachusetts, New York, Pennsylvania, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.

USDOL Multistate Joint Employer Comment 06.25.19