In today’s news and commentary, the NLRB officially rescinds the Biden-era standard for determining joint-employer status; the DOL proposes a rule that would rescind the Biden-era standard for determining independent contractor status; and Walmart pays $100 million for deceiving delivery drivers regarding wages and tips.

On Thursday, the National Labor Relations Board issued a final rule rescinding the Biden Administration’s standard for determining joint-employer status. Citing a 2024 order by the U.S. District Court for the Eastern District of Texas that prevented the 2023 Biden standard from ever going into effect, the Board officially returned to the standard promulgated by the first Trump administration in 2020. While the Biden-era rule determined joint-employer status by considering the alleged joint employers’ “authority to control essential terms and conditions of employment, whether or not such control is exercised,” the Trump rule focuses on whether the joint employer actually exercises “direct control” over the terms of employment. The NLRB failed to provide notice and an opportunity for comment when issuing this rule, arguing that because the rule is merely a “ministerial” action reflecting the order of the U.S. District Court, it falls within the Administrative Procedure Act’s “good cause” exception to notice and comment. As Greg Volynsky covered several years ago, Democratic and Republican administrations have flip-flopped on this rule for over a decade.

Also on Thursday, the Department of Labor proposed a rule that would rescind the Biden Administration’s 2024 rule for determining employee or independent contractor status. While the DOL stopped enforcing the Biden-era standard last year, the agency now intends to return to the first Trump Administration’s standard for independent contractor status “with a few modifications.” Importantly, the DOL seeks to define independent contractor status not just for the purposes of the Fair Labor Standards Act, but also the Family and Medical Leave Act and Migrant and Seasonal Agricultural Worker Protection Act. The new rule uses an “economic reality” test in which the ultimate inquiry focuses on whether the employee is “economically dependent on an employer for work.” To determine economic dependence, the DOL focuses on factors including “the nature and degree of control over the work” and “the worker’s opportunity for profit or loss based on initiative and/or investment.” The rule is currently open for public comment.

Earlier this week, Walmart agreed to pay $100 million to settle a lawsuit by the Federal Trade Commission and a number of states alleging the company engaged in deceptive practices against delivery drivers. The lawsuit asserted that Walmart deceived delivery drivers in its Spark program about how their base pay was calculated and whether tips would be split between multiple drivers. The suit also alleged that the company deceived customers by falsely advertising that all tips would go directly to drivers. Pennsylvania Attorney General Dave Sunday stated that “Walmart was aware almost immediately of issues with the program, and drivers being paid less than face value, yet did nothing to remedy the situation.”