The U.S. Department of Labor (DOL) recently announced a significant proposed rule that would redefine the criteria for determining joint employer status under key federal employment statutes, including the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). This proposal represents an effort to establish a clear, consistent and nationwide framework for assessing when multiple entities share legal responsibility for employment obligations, addressing longstanding ambiguities and regional disparities in joint employer determinations.
Background and Context
Historically, the concept of joint employment has varied, with different agencies, courts and jurisdictions applying different standards. The prior Trump-era rule of 2020 emphasized a strict "actual control" test, requiring direct and substantial control over workers—such as hiring, firing, scheduling and recordkeeping—to establish joint liability. This approach made it more challenging for third-party contractors or franchises to hold businesses liable for employment law violations.
However, that rule was struck down by the courts in 2021, leading to inconsistent application of joint employment standards. The Biden administration rescinded the 2020 rule and implemented a “totality of the circumstances" test, which allowed for variability in approach across jurisdictions. This 2026 proposal seeks to provide a unified,...
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