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

Olympic Wage ordinance 2028
Photo credit: Unite Here Local 11

Petition fails to stop L.A. hotels wage increase

Summary:

  • Failed petition clears way for Los Angeles “Olympic Wage” to reach $30 by 2028.
  • L.A. Alliance referendum fell 9,000 signatures short.
  • AAHOA calls ruling a setback for hotel owners.

A PETITION FOR a referendum on Los Angeles’s proposed “Olympic Wage” ordinance, requiring a $30 minimum wage for hospitality workers by the 2028 Olympic Games, lacked sufficient signatures, according to the Los Angeles County Registrar. The ordinance will take effect, raising hotel worker wages from the current $22.50 to $25 next year, $27.50 in 2027 and $30 in 2028.

Keep ReadingShow less
AHLA Foundation expands hospitality education

AHLA Foundation expands hospitality education

Summary:

  • AHLA Foundation is partnering with ICHRIE and ACPHA to support hospitality education.
  • The collaborations align academic programs with industry workforce needs.
  • It will provide data, faculty development, and student engagement opportunities.

THE AHLA FOUNDATION, International Council on Hotel, Restaurant and Institutional Education and the Accreditation Commission for Programs in Hospitality Administration work to expand education opportunities for students pursuing hospitality careers. The alliances aim to provide data, faculty development and student engagement opportunities.

Keep ReadingShow less
U.S. holiday travel 2025 trends

Report: U.S. consumers’ holiday travel intent dips

Summary:

  • U.S. holiday travel is down to 44 percent, led by Millennials and Gen Z.
  • Younger consumers are cost-conscious while older generations show steadier travel intent.
  • 76 percent of Millennials are likely to use AI for travel recommendations.

NEARLY 44 PERCENT of U.S. consumers plan to travel during the 2025 holiday season, down from 46 percent last year, according to PwC. Millennials and Gen Z lead travel intent at 55 percent each, while Gen X sits at 39 percent and Baby Boomers at 26 percent.

Keep ReadingShow less
Report: Global RevPAR to rise 3–5 percent in 2025

Report: Global RevPAR to rise 3–5 percent in 2025

Summary:

  • Global hotel RevPAR is projected to grow 3 to 5 percent in 2025, JLL reports.
  • Hotel RevPAR rose 4 percent in 2024, with demand at 4.8 billion room nights.
  • London, New York and Tokyo are expected to lead investor interest in 2025.

GLOBAL HOTEL REVPAR is projected to grow 3 to 5 percent in 2025, with investment volume up 15 to 25 percent, driven by loan maturities, deferred capital spending and private equity fund expirations, according to JLL. Leisure travel is expected to decline as consumer savings tighten, while group, corporate and international travel increase, supporting RevPAR growth.

Keep ReadingShow less
Hotel data challenges report highlighting AI and automation opportunities in hospitality

Survey: Data gaps hinder hotel growth

Summary:

  • Fragmented systems, poor integration limit hotels’ data access, according to a survey.
  • Most hotel professionals use data daily but struggle to access it for revenue and operations.
  • AI and automation could provide dynamic pricing, personalization and efficiency.

FRAGMENTED SYSTEMS, INACCURATE information and limited integration remain barriers to hotels seeking better data access to improve guest experiences and revenue, according to a newly released survey. Although most hotel professionals use data daily, the survey found 49 percent struggle to access what they need for revenue and operational decisions.

Keep ReadingShow less