The U.S. Department of Labor recently announced a proposal for determining when a company using contract or temporary labor qualifies as a “joint employer” under U.S. law.

Under the Fair Labor Standards Act (FLSA) employers are required to pay nonexempt employees at least the federal minimum wage, plus overtime when an employee exceeds 40 hours in a workweek. “Although the FLSA does not use the term ‘joint employer,’ the act contemplates situations where additional people are jointly and severally liable with the employer for the employee’s wages due under the act,” the proposed rule states.

The proposal appeared in the ...