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June 26, 2019


Raoul & 18 AGs Submit Letter to Department of Labor Challenging Proposed Change to Joint Employer Status

Chicago — Attorney General Kwame Raoul, as part of a multistate group of 19 attorneys general, opposed the U.S. Department of Labor’s proposal to narrow the interpretation of joint employment, thereby complicating how states enforce labor laws and leaving millions of workers vulnerable to labor violations.

In a letter sent Tuesday to Department of Labor Secretary Alexander Acosta, Raoul and the attorneys general challenge the department’s proposed change to joint employer status under the Fair Labor Standards Act (FLSA). The joint employment rule determines employer liability for wage theft or other workplace violations when two or more entities jointly employ a worker. Raoul and the attorneys general contend that the department has failed to justify the proposed new interpretation and draws on outdated analysis that does not consider the changing nature of today’s workplace relationships, including the fact that a growing number of businesses are changing organizational models by outsourcing integral functions but still maintaining control of workers.

“When businesses are increasingly using contractors, employments agencies or other third parties to meet staffing needs, workplace protections should be clear,” Raoul said. “I am committed to fighting any policy that could compromise the protections our workers deserve.”

Under the proposed rule, joint employment would be determined by whether an employer hires or fires the employee; supervises and controls the employee’s schedule and working conditions; determines the employee’s rate and method of payment; and maintains the employee’s records. But according to Raoul and the attorneys general, this proposal is inconsistent with the purpose of the FLSA – to protect workers – and ignores more than 30 years of private sector development during which the economy and the workplace have changed.

Further, the attorneys general write that the department’s proposed rule does not reflect today’s workplace relationships, where businesses increasingly share employees using third-party management companies, independent contractors, staffing agencies, or other labor providers. By narrowing the scope of joint employment, the department’s change will leave millions of workers vulnerable to unchecked violations of federal and state labor laws.

If the federal standard fails to encompass companies that pay for subcontracted employees while also controlling the terms of employment, the attorneys general contend that gaps in legal compliance will inevitably increase, leaving workers at greater risk of exploitation.

The letter builds on Attorney General Raoul’s efforts to fight unlawful employment practices and end the wage theft crisis. After becoming Attorney General, Raoul initiated Senate Bill 161 to establish a Worker Protection Unit within the Attorney General’s office. The unit will have the authority to enforce existing laws that protect workers’ rights and lawful businesses in Illinois. The Illinois General Assembly passed the legislation in May, and it currently awaits consideration by the governor.

In April, Raoul testified before the Congressional House Appropriations Labor, Health and Human Services, and Education Subcommittee about the wage theft crisis. In his testimony, Raoul highlighted the need for SB 161, as well as other state-level efforts to respond to the crisis of wage theft and the importance of the federal government as a partner in these efforts.

Joining Raoul in submitting the comment letter were the attorneys general from California, Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.


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