Key Takeaways:
- The DOL has proposed a new multi-factor standard addressing vertical and horizontal joint employer status under the FLSA, FMLA, and MSAWPA.
- The proposal could redraw wage-and-hour liability boundaries by expanding when multiple entities share responsibility.
The Department of Labor strikes again. To help address circuit splits and compliance challenges on April 22, 2026, the DOL proposed a new rule attempting to establish a more uniform standard to determine whether joint employment exists under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA).
Horizonal versus Vertical Joint Employment
Joint employment is when a worker is considered employed by two or more entities such that each may be liable for compliance with the FLSA. Prior administrations have taken markedly different approaches—ranging from broader, worker-friendly interpretations to narrower, control-based frameworks—when determining whether joint employment exists, leaving employers navigating conflicting guidance.
The DOL’s current proposal aims to resolve that inconsistency by creating separate tests for “vertical” and “horizontal” joint employment. Vertical joint employment exists when a worker has a direct employment relationship with one employer but is controlled by another. Horizontal joint employment exists when an individual works for two or more related employers that jointly control the work....
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