The U.S. Department of Labor's Wage and Hour Division has published a Notice of Proposed Rulemaking that would harmonize the joint employer analysis across three of the agency's…
The U.S. Department of Labor's Wage and Hour Division has published a Notice of Proposed Rulemaking that would harmonize the joint employer analysis across three of the agency's most consequential statutes: the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). For employers operating with shared workforces, staffing partnerships, or franchise structures, the proposal signals a meaningful shift in how liability may be allocated among related entities. The public comment period closes on June 22, 2026, providing a narrow but important window for affected businesses to influence the final rule.
Historically, joint employer determinations have varied across these statutes, leaving employers to navigate inconsistent standards depending on which law was at issue. Under the proposed framework, the Department would replace that patchwork with a unified approach that distinguishes horizontal joint employment, where two or more employers share an employee's services, from vertical joint employment, where a worker engaged by one employer is economically dependent on another. The clarified distinction is designed to bring greater predictability to enforcement and compliance planning.
At the heart of the proposal is a four-factor test for assessing joint employer status. The factors include the authority to hire and fire, control over schedules and working conditions, determination of pay rates and methods, and the maintenance of employment records. Businesses should benchmark these factors against their existing contracting, vendor management, and human resources practices, paying particular attention to provisions that may inadvertently signal joint control.
Acting Secretary Keith Sonderling has framed the proposal as a clarity measure intended to benefit both businesses and workers. Employers with potential joint employer exposure should take this opportunity to evaluate liability under the proposed standards, review staffing agreements, franchise documents, and vendor contracts, and consider whether to submit written comments before the June 22, 2026 deadline. Engagement during the rulemaking process may meaningfully shape the final regulation and the operational obligations that follow.
This article is provided for general informational purposes only and does not constitute legal advice. Clients with questions about how the proposed rule may affect their specific operations should seek tailored guidance from qualified counsel.