On April 22, 2026, the U.S. Department of Labor (DOL) issued a proposed rule that would set a single standard for joint employer status under the FLSA, FMLA, and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”). 
The proposed rule would offer clarity for employers around when multiple employers are jointly responsible for protecting employee wages and other rights.
Many will recall that during the first Trump administration, the DOL issued a similar final rule on this very same topic that took effect in March 2020 (the “2020 Rule”). However, that rule was rescinded in July 2021 under the Biden administration.
The DOL Proposed Rule on Joint Employer Status
While the new proposed rule certainly has many similarities to the 2020 Rule, there are important differences, most of which are designed to help ameliorate issues which led to the prior recission and associated lawsuits. In sum:
Horizontal joint employment situations
The proposed rule set forth the standard that 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.
Vertical joint employment situations
The proposed rule set forth the same four-part test present in the 2020 Rule that looked at 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;
- Determines the employee’s rate and method of payment; and
- Maintains the employee’s employment records.
However, the proposed rule also explains that additional factors may be relevant in assessing vertical joint employment, but that a unanimous finding on the above four factors in either direction would establish a “substantial likelihood” regarding whether an individual or entity is a joint employer with another.
The proposed rule also advises that “reserved control” may be considered but is less indicative of vertical joint employment than exercised control, consistent with the judicial focus on “economic reality” in FLSA employment disputes. Further, the proposed rule excludes the consideration of specific factors that are relevant only in assessing whether a worker is an employee or independent contractor and would exclude the relevance of certain general business models and business practices when determining joint employment.
What Employers Need to Know About Next Steps
The proposed rule now enters the public comment period until June 22. It is anticipated that a final rule will be issued later this year and that while it will likely have some differences from the presently proposed rule, that it will be similar in substance to the above provisions. We plan to update you further if a final rule is issued.