• The DOL has issued a new proposed rule to clarify when joint-employer liability exists under the FLSA, aiming to establish a nationwide standard.
• The rule also incorporates the joint-employer standards into the rules implementing the FMLA and the MSPA.
• The proposal sets forth a four-factor test for vertical joint employment that recognizes the relevance of a potential joint employer’s reserved right to control but that also emphasizes that actual exercise of control is more relevant to determining joint employer status.
• The proposed rule would further clarify that common business arrangements, such as franchisor arrangements and requirements to comply with general legal obligations or health and safety standards, do not alone establish joint-employer status.

The DOL states that the proposal reflects the “commonality” between federal court precedents and resolves a circuit split to create a nationwide standard. The notice of proposed rulemaking (NPRM), titled, “Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave,” will be published in the Federal Register on April 23, 2026.

Defining Joint-Employer Liability

According to the DOL, the proposed rule would establish a nationwide standard for use by the DOL’s investigators and enforcement personnel, promote clarity and uniformity for employers and employees, reduce litigation, and ensure that joint-employer status determinations under FMLA and MSPA regulations align with the DOL’s FLSA analysis...

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