Business group calls for pause on joint employer rules

Tony Gagliardi NFIB

The leader of a small business advocacy group has called for more time to consider changes to wage laws in Colorado.

“These are not normal times,” said Tony Gagliardi, state director of the National Federation of Independent Business in Colorado.

Gagliardi provided oral testimony to the Colorado Department of Labor and Employment Division of Labor Statistics and Standards calling for an extension in the comment period on proposed amendments to overtime and minimum pay rules, wage and hour direct investigation rules and the Wage Protection Act.

Business owners already face a multitude of factors which will impact the prospect for survival, such as the continuing health and safety factors of the COVID-19 pandemic; the various closure orders around the state of Colorado; and other issues, such as getting employees to return to work and, most recently, an unemployment trust fund which will become insolvent in the very near future,” he said.

The first notice of the proposed rule changes was issued April 15, a time when business owners were dealing with the effects of the coronavirus pandemic and related closures, he said. “Great uncertainty for business owners dominated their every thought. Questions such as would their business be forced to close, would their business be classified as an essential business and what would become of their employees should the business be forced to close.”

Proposed changes to overtime and earnings statements would take into account a new federal test to determine joint employment agreements and whether more than one entity may be considered a worker’s employer and held equally liable for wage and hour violations. A four-factor federal test considers whether a potential joint employer hires or fires employees, controls work schedules and employment conditions, determines wage payment rates and methods and maintains employment records.

Gagliardi said the new state rules would discourage larger firms from working with smaller firms, upend franchising agreements and wrongly assign liability.

“It does not make sense to hold Business A liable for Business B’s mistake if Business A was not actively controlling Business B’s employees,” he said. “The federal government nicely clarified the matter recently. It would be nice if the state cleaved to that.”