On April 22, 2026, the U.S. Department of Labor (“DOL”) announced a Notice of Proposed Rulemaking to revise its analysis used to determine joint employer status under three federal employment laws: the Fair Labor Standards Act (“FLSA”), Family and Medical Leave Act (“FMLA”), and Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”). Joint employer status is most often found in business partnerships involving subcontractors, staffing agencies, or franchisees. Under this test, multiple employers can be held jointly and severally liable for violations including, but not limited to, unpaid wages, overtime, and other damages.
The Proposed Rule
The proposed rule adopts a four-factor analysis examining whether the potential joint employer:
- Hires or fires the employee;
- Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
- Determines the employee’s rate and method of payment; and
- Maintains the employee’s employment records.
A unanimous finding on these four factors in either direction will establish a “substantial likelihood” regarding whether an individual or entity is a joint employer with another. The proposed rule also excludes the relevance of certain business models and practices when determining joint employer status, including:
- Certain contractual agreements related to health, safety, or legal compliance, including anti-harassment policies, background checks, and workplace safety protocols;
- Providing a sample employee handbook or other forms to another employer;
- Offering an association health or retirement plan to another employer or participating in such a plan;
- Jointly participating in an apprenticeship program with another employer;
- Operating as a franchisor or similar business model; and
- Quality control standards to ensure consistent quality of work product, brand, or business reputation.
The DOL announced this move is intended to provide clarity and uniformity for employers by resolving splits in approaches taken by federal circuit courts in applying the joint employer rule. However, these federal circuit courts retain ultimate authority in deciding what standards to apply for determining joint employer status.
Public Comment Period
A 60-day notice and comment period for public input on the proposed rule is open through June 22, 2026. The DOL will then work to adopt a final version of the rule that may incorporate changes based on public feedback.
For more information on this or any related topic, please contact Nick Golding or any of the KDDK Labor and Employment Law professionals.
