The guidelines, issued by the United States Department of Labor (DOL) to assist employers including restaurants owned jointly with or managed by other companies, recently have been thrown into question by a New York federal district court. Joint employer liability is a doctrine used to hold one entity liable for the employment and labor obligations of another entity under common control or managed as a nominally separate operation.

As part of its authority, the DOL issues rules and guidance to interpret laws including the federal wage and hour law called the Fair Labor Standards Act (FLSA). The DOL does not have authority to make law, and although its rules are not binding upon the courts, DOL rules can be influential and used by courts to interpret statutes. This latest court decision may leave employers guessing how to assess their legal status under the joint employer rules.