On Sunday, President Donald Trump and his administration rolled back a significant Obama-era rule that heavily favored unions, deemed the “joint-employer” rule.
The administration said that companies shouldn’t be liable for the violations of other businesses, particularly if they all share a corporate brand.
According to the Washington Examiner, who deemed the Obama rule the “most ambitious” of his time:
The Obama administration had sought to make franchiser corporations such as McDonald’s legally responsible for workplace violations by their franchisees, even if the later were legally independent businesses. The previous administration based this on the theory that a corporation was a “joint employer” with the other company even if the former only had “indirect control” over the latter company’s policies.
Trump administration has been working to roll back the “joint employer” rule since President Trump took office. The Labor Department on Sunday issued an official rule that corporations were only liable when they had “direct control” over the other company’s policies. The administration clarified that to be joint employers, both businesses had to be able to: hire or fire an employee; have control over their work schedule; control the workers’ pay; and maintain the workers’ employment records.
In 60 days, the new rule is set to go in effect.
“This final rule furthers President Trump’s successful, government-wide effort to address regulations that hinder the American economy and to promote economic growth,” said Eugene Scalia, the secretary of the Department of Labor.
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