The U.S. Department of Labor (DOL) has reentered the joint-employer arena with a new proposed rule that aims to bring uniformity to a fractured legal landscape.
The April 23, 2026 Notice of Proposed Rulemaking would establish a single standard for joint-employer status under the FLSA, FMLA, and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”), filling a void since the 2021 rescission of the 2020 rule issued in the last days of the first Trump Administration.
For employers, the proposal will feel familiar. The DOL largely restores the 2020 framework while pulling back on the provisions that drew the most judicial scrutiny.
Structure Returns, But Flexibility Increases
The new proposed rule revises the 2020 rule’s approach to so-called “vertical” joint employment, where one company employs the worker but another company benefits directly from the employee’s work—for example, staffing company arrangements in which the staffing company directly employs the worker but the client company directs day-to-day work. The proposal reinstates a control-focused, four-factor framework for vertical joint-employer analysis, examining whether both employers exercise control over:
But the DOL makes two key adjustments that materially affect risk:
1. Reserved Control Matters Again
The 2020 rule minimized the significance of contractual rights that were...
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