On April 22, the U.S. Department of Labor’s (DOL) Wage and Hour Division announced a proposed rule to address joint employer status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. Joint employment is a concept that applies when two or more businesses share control over an employee’s working conditions. The proposal aims to establish a single and clearer nationwide standard to help resolve legal uncertainty for determining when two or more employers are jointly liable for wages, overtime, and other worker protections. If finalized, the DOL’s proposed rule would be the agency’s first joint employer regulation since the Biden administration rescinded the prior joint employer rule in 2021.

The proposed rule includes a few important key factors:

• Advises that horizontal joint employment exists when separate employers are sufficiently associated with respect to the employment of the same employee, but that business relationships which have little to do with the employment of specific employees—such as sharing a vendor or being franchisees of the same franchisor—are alone insufficient to establish joint employment.
  
  
• Adopts a four-factor analysis for use in every case of potential vertical joint employment, examining whether the potential joint employer:
• hires or fires the employee;
• supervises and controls the employee's work schedule or conditions of employment to a substantial degree;
• ...

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