On April 22, 2026, the Department of Labor’s (“DOL”) Wage and Hour Division (“WHD”) issued a Notice of Proposed Rulemaking that would restore federal regulatory guidance on joint employer status under the Fair Labor Standards Act (“FLSA”)—guidance that has been absent since July 2021. The Proposed Rule would reinstate a four-factor test for determining “vertical” joint employment and readopt a well-established criterion for “horizontal” joint employment. Critically, the Proposed Rule would also align joint employer determinations under the Family and Medical Leave Act (“FMLA”) and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”) with the FLSA standard, because both statutes incorporate the FLSA’s definition of “employ.” According to the DOL, the goal is to provide clarity and a measure of uniformity for employers, workers, and federal wage and hour enforcement alike.
Background: The 2020 Rule and Its Rescission
In January 2020, the DOL published a final rule (the “2020 Rule”) addressing joint employer status under the FLSA. This was the first comprehensive regulatory guidance on the topic in decades. The 2020 Rule distinguished between two types of joint employment scenarios and deployed separate tests for each.
The first type of joint employment scenario was “vertical.” This occurs when an employee’s work simultaneously benefits two or more employers. The 2020 Rule applied a four-factor test asking whether the potential joint employer: (1) hires or...
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