WASHINGTON — The joint employer rule has been withdrawn, restoring the 2020 federal standard governing how businesses are classified under labor law.
Education and Workforce Committee Chairman Tim Walberg announced the change Thursday, calling it a shift away from the Biden administration’s rule and a return to the framework adopted in 2020.
Walberg said the previous rule created regulatory uncertainty for franchises and small businesses. He said restoring the earlier standard provides clearer guidance for employers and workers.
The joint employer rule determines when two businesses can be held jointly responsible for labor violations and collective bargaining obligations.
Supporters of the withdrawal argue it reduces federal oversight and compliance burdens. Critics of the 2020 standard have previously said it narrows accountability in franchise and contract work arrangements.
The Education and Workforce Committee has supported reinstating the 2020 rule.
Federal agencies are expected to implement the change in accordance with labor regulations.