Business groups applauded the Labor Department's announcement Monday that it was officially proposing to roll back the Obama administration's so-called "joint employer" rule, a reversal that would sharply limit businesses' legal liability for workplace violations, especially franchisers like McDonald's.

The Obama administration had sought to make businesses liable for workplace liabilities at other businesses even if they had only "indirect control" — a vague standard that business groups objected to. Traditionally, one business had to have direct control over another's policies to be considered a joint employer.

Monday's revamped rule by the DOL would set the narrower requirement that the company must "actually" exercise power over the other's policies. This is similar to the "direct" control, though the new version would appear to allow somewhat more flexibility.

"This proposal will reduce uncertainty over joint employer status and clarify for workers who is responsible for their employment protections," said Labor Secretary Alexander Acosta.

Business groups have lobbied hard to rollback the Obama-era standard, while labor unions have fought to keep it. Under the Obama rule, unions could target franchise corporations and organize the entire businesses at once, whereas without it they must organize each franchisee individually.

"Through this proposal, the Department of Labor has the chance to undo one of the most harmful economic regulations from the past administration and replace it with a rule that creates certainty for America’s 733,000 franchise businesses," said Matt Haller, senior vice president for the International Franchise Association. "An expanded joint employer standard has held back tens of billions of dollars in economic output each year due to a proliferation of frivolous lawsuits."

The rules proposed Monday say that a potential joint employer must have the power to: hire or fire a worker, supervise and control workplace policies, determine the employee's payment, and maintain the employment records.

There will be a 60-day comment period for the rule before the department can make it official.