Skip to content

Search

Latest Stories

Labor Department approves new joint-employer status rules

A four-point test will determine if a company shares responsibility for employees’ wages

THE U.S. DEPARTMENT of Labor has updated the Fair Labor Standards Act to clarify the definition of joint-employer status. It is the first major update to FLSA in 60 years and addresses an issue that has been a point of concern for the hospitality industry.

Companies and individuals that are considered joint employers, meaning they are jointly and severally liable for employees’ wages, are required under FLSA to pay a federal minimum wage plus overtime. The new Labor Department rule first announced in April essentially establishes a four-factor test based on precedent to determine if two entities meet standards that make them joint employers of a shared labor pool.


The test would establish if each company has the power to hire or fire shared employees; supervise and control the employees schedules and work conditions; determine the employees’ rate and method of payment; and maintain the employees’ employment records.

Other factors that may affect joint-employer status are defined in the new rule while specific business models, contractual agreements and business practices that do not make joint employer status more or less likely are included.

“The changes in this final rule break down barriers that keep companies from constructively overseeing, guiding and helping their business partners,” said Cheryl Stanton, the Labor Department’s wage and hour division administrator, in a statement. “For small business owners, and the employees working in those businesses, the relationship and the guidance coming from franchisors and other contracting companies can greatly improve the workplace and help them create jobs.”

A lack of clear standards on joint-employer status has slowed business development and new hiring out of concern by franchisors that they may be assuming responsibility for a franchisee’s employees, said AAHOA President and CEO Cecil Staton in a statement supporting the new rule.

“Over 80 percent of AAHOA members own franchised properties. The franchise business model continues to serve as an onramp to economic empowerment for America’s entrepreneurs,” Staton said. “Returning to the traditional joint employer standard gives owners the peace of mind that they will remain in control of their businesses.”

Much of the confusion over joint-employer status followed a series of decisions by the National Labor Relations Board that is still considering its own rules to clarify joint-employer status. The board’s definition of joint-employer status has been in limbo since Feb. 26, 2018, when the NLRB vacated its 2017 decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. in response to a court finding that one of the board members had a conflict of interest in that case. As a result, the board’s definition on joint employers under the National Labor Relations Act and the Fair Labor Standards Act reverts to the 2015 Browning-Ferris Industries case, which the Hy-Brand decision had overruled.

On Dec. 28, the U.S. District of Columbia Circuit Court of Appeals’ ruling upheld NLRB’s joint-employer test defined in its 2015 Browning-Ferris decision, saying it was correct to find that a company’s “right to  control  and  indirect  control” could be considered in deciding its joint-employer status. At the same time, it sent the issue back to the board for consideration over the scope of the definition of indirect control.

More for you

Trump reviewing 55 million us visas
Getty Images

Trump reviewing 55 million visas

Summary:

  • The Trump administration says it is reviewing more than 55 million visa holders.
  • Reviews cover a wide range of visas for law enforcement and overstay violations.
  • The administration also suspended worker visas for foreign commercial truck drivers.

THE TRUMP ADMINISTRATION is reviewing more than 55 million people who hold valid U.S. visas for potential violations. It is expanding a policy of “continuous vetting” that could result in revocation and deportation.

Keep ReadingShow less
Peachtree Funds Rio Las Vegas Renovations | $176M CPACE Loan
Photo credit: Hyatt Hotels Corp.

Peachtree originates retroactive CPACE loan for Rio Vegas

Summary:

  • Peachtree Group originated a $176.5 million retroactive CPACE loan for a Las Vegas property.
  • The deal closed in under 60 days and ranks among the largest CPACE financings in the U.S.
  • The company promotes retroactive CPACE funding for commercial real estate development.

PEACHTREE GROUP ORIGINATED a $176.5 million retroactive Commercial Property Assessed Clean Energy loan for Dreamscape Cos.’s Rio Hotel & Casino in Las Vegas. The deal, completed in under 60 days, is its largest credit transaction and one of the largest CPACE financings in the U.S.

Keep ReadingShow less
Global hotel construction pipeline reaches record 15,871 projects in Q2 2025, with U.S. and Dallas leading growth
Photo Credit: iStock

Report: Global pipeline hits 15,871 projects

Summary:

  • Global pipeline hit a record 15,871 projects with 2.4 million rooms in Q2.
  • The U.S. leads with 6,280 projects; Dallas tops cities with 199.
  • Nearly 2,900 hotels are expected to open worldwide by the end of 2025.

THE GLOBAL HOTEL pipeline reached 15,871 projects, up 3 percent year-over-year, and 2,436,225 rooms, up 2 percent, according to Lodging Econometrics. Most were upper midscale and upscale, LE reported.

Keep ReadingShow less
HAMA Launches 20th Student Case Competition in USA
Photo Credit: iStock

HAMA launches 20th student case competition

Summary:

  • HAMA is accepting submissions for its 20th annual student case competition.
  • The cases reflect a scenario HAMA members faced as owner representatives.
  • Teams must submit a financial analysis, solution and executive summary.

THE HOSPITALITY ASSET Managers Association is accepting submissions for the 20th Annual HAMA Student Case Competition, in which more than 60 students analyze a management company change scenario and provide recommendations. HAMA, HotStats and Lodging Analytics Research & Consulting are providing the case, based on a scenario HAMA members faced as owner representatives.

Keep ReadingShow less
Stonebridge hotel management expansion
Photo credit: Stonebridge Cos.

Stonebridge adds Statler Dallas to managed portfolio

Summary:

  • Stonebridge Cos. added the Statler Dallas, Curio Collection by Hilton, to its managed portfolio.
  • The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group.
  • The property is near Main Street Garden Park, the Arts District and the Dallas World Aquarium.

STONEBRIDGE COS. HAS contracted to manage the Statler Dallas, Curio Collection by Hilton in Dallas to its managed portfolio. The hotel, opened in 1956 and relaunched in 2017, is owned by Centurion American Development Group, led by Mehrdad Moayedi.

Keep ReadingShow less