On April 22, 2026, the Department of Labor’s (DOL) Wage and Hour Division announced publication of a proposed rule that would address joint employer status under federal wage and hour laws, including the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act.
In particular, the proposed rule would:
- Set forth distinct standards for determining joint employer status in “vertical” and “horizontal” scenarios.
- Advise that “horizontal joint employment” exists when separate employers are sufficiently associated with respect to the employment of the same employee, but that business relationships that 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.
- Adopt a four-factor analysis for use in every case of potential vertical joint employment, examining whether the potential joint employer: (1) hires or fires the employee; (2) supervises and controls the employee’s work schedule or conditions of employment to a substantial degree; (3) determines the employee’s rate and method of payment; and (4) maintains the employee’s employment records.
- Explain that additional factors may be relevant in assessing vertical joint employment, but that a unanimous finding on the four factors in either direction would establish a “substantial likelihood” regarding whether an individual or entity is a joint employer with another.
- Advise that “reserved control” may be considered but is less indicative of vertical joint employment than exercised control.
- Exclude the consideration of factors that are relevant only in assessing whether a worker is an employee or independent contractor, such as whether the employee (1) is in a job that otherwise requires special skill, initiative, judgment, or foresight; (2) has the opportunity for profit or loss based on his or her managerial skill; and (3) invests in equipment or materials required for work or the employment of helpers.
- Exclude the relevance of certain general business models and business practices when determining joint employment.
- Provide examples illustrating how the proposed analysis would apply in certain factual circumstances.
DOL encourages interested parties to submit comments on the proposal by June 22, 2026.
