DOL Proposes New Joint Employer Rule, Seeking to Clarify Liability Standards Under Federal Wage and Hour Laws
By: Robert G. Lian, Jr. , Margaret Grace Maraschino, Laura D. Smolowe, Katherine I. Heise, Lindsey Prutsman (Associate)
Key Takeaways
- On April 23, 2026, the U.S. Department of Labor (DOL) published a proposed rule clarifying the standard for determining when two or more entities are “joint employers” under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The proposed rule aims to fill the regulatory void left since the DOL rescinded its 2020 joint employer rule in July 2021.
- The proposed rule distinguishes between “vertical” and “horizontal” joint employment, two scenarios that implicate different analytical frameworks.
- The proposed rule provides clarity that certain common business practices—including operating as a franchisor, requiring compliance with legal obligations and health/safety standards, and establishing quality control measures—do not, standing alone, make joint employer status more or less likely.
Overview of the Proposed Rule
Since July 2021, when the DOL rescinded its 2020 joint employer rule following a successful legal challenge, there has been no federal rule addressing joint employer status under the FLSA. In its absence, the DOL has been applying different vertical joint employment standards depending on which federal circuit’s judicial precedent...
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