Another Economic Reality: Single, Rational Test Needed for Who Is an “Employer”

DOLNLRBEarlier this month, in An Economic Reality: Uniform Regulatory Definition Needed for Who Is an “Employee”, we argued that a standardized, control-based test for legally categorizing workers would benefit both employers and employees. In this commentary, we explain why similar uniformity is urgently needed in how regulatory agencies and courts define “employer.”

The legal definition of “employer” is critical because employers are responsible for compliance with federal and state labor laws and can be held vicariously liable for the actions of their employees. It is most relevant, and controversial, in situations where businesses outsource or subcontract certain work responsibilities, and in franchise arrangements. Too broad a definition of employer could force businesses that outsource, subcontract, or franchise to act as “joint employers” for employees of entirely separate businesses. Continue reading “Another Economic Reality: Single, Rational Test Needed for Who Is an “Employer””