U.S. Department of Labor Unveils Joint Employer Rule Proposal

Four Factors Establish Joint Employer Control

On April 22, 2026, the U.S. Department of Labor, Wage and Hour Division, (DOL) announced a proposed rule that, if
finalized, would revise the standard for joint employer status under three federal wage and hour laws: the Fair Labor
Standards Act (FLSA); the Family and Medical Leave Act (FMLA); and the Migrant and Seasonal Agricultural Worker
Protection Act (MSPA). This structure mirrors the DOL’s plan for its independent contractor rule, as we previously
reported.

In sum, the DOL seeks to create a single nationwide standard for when two or more employers can be jointly liable for
workplace offenses under federal laws that protect wages, unpaid leave, and migrant and seasonal farm employees. This
rule, if enacted, will impact franchises, staffing agencies, gig workers, businesses that outsource their labor, and
employers in the health care and construction industries, among others.

The first Trump Administration’s DOL issued a rule that required one business to exert “actual” control over another
company’s workers to be jointly on the hook for wage, overtime and other labor violations. After a federal court largely
vacated the Trump 1.0 rule, the Biden Administration’s DOL rescinded that rule.

The current proposed rule takes a different approach from Trump 1.0, stating that a set of four factors should “weigh the
economic reality of the potential joint employer’s control, direct or indirect, over the employee.”

The four factors are whether a company:
1. Has the power to hire or fire a worker.
2. Supervises or controls a worker’s schedule or conditions of employment to a substantial degree.
3. Determines the rate and method of payment.
4. Maintains a worker’s employment records.

According to the proposal, additional factors may be relevant in assessing joint employment, but a unanimous finding on
the above four factors in either direction would establish a "substantial likelihood" regarding whether an individual or
entity is a joint employer with another business.

The rule is scheduled to be published in the Federal Register on April 23, 2026. The DOL will accept public comments until
June 22, 2026. Employers affected by this rule should consider submitting comments during this 60-day period. If the
proposed rule is finalized, employers should reassess their work-sharing agreements, wage-and-hour policies and FMLA
leave procedures through the lens of the new standard, ensuring that all joint employer issues are properly addressed.
In the meantime, employers should recognize that the proposed rule does not affect the analysis for determining joint
employer status under other laws or standards, including state law. Employers should continue to follow all applicable
state and local laws to ensure they are in compliance with all relevant standards.

Additional Assistance
For further assistance, please contact any of the attorneys on our Labor and Employment Practice Team or the Phillips
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