Joint employer status under the Fair Labor Standards Act (FLSA) determines when two or more entities are both considered employers of the same worker(s) and thus jointly and severally liable for FLSA obligations, such as minimum wage, overtime pay, recordkeeping, and child labor restrictions. If joint employment exists, each employer is responsible for the full amount of any unpaid wages or damages owed, even if the worker’s hours or violations are split across the employers. This concept commonly arises in scenarios like:
– – Vertical joint employment — A worker is employed by one entity (e.g., a staffing agency or subcontractor) but another entity (e.g., a client company or franchisor) also benefits from or influences the work.
– – Horizontal joint employment — Separate but associated employers (e.g., two commonly owned businesses) share the same worker’s services, with operations that are sufficiently integrated regarding that employee.
When joint employment is found, all hours worked for the joint employers in a workweek are typically combined for overtime calculations (hours over 40 must be paid at 1.5 times the regular rate), and both entities can be held liable for violations.
Joint employment is not explicitly defined in the statute but has been recognized in DOL regulations and case law for decades. The key question is whether the employers’ relationships with the worker (and each other) mean the work for one is not “completely disassociated” from the work for the other.
Since the Biden-era DOL rescinded the 2020 joint employer rule in 2021, there has been no formal DOL regulation providing specific guidance on joint employer status under the FLSA (or aligned statutes like the Family and Medical Leave Act (FMLA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA)). The DOL and courts have instead relied on pre-2020 case law, opinion letters, and a “totality of the circumstances” or economic realities approach, which can vary by jurisdiction.
On April 22/23, 2026, the DOL (Wage and Hour Division) published a Notice of Proposed Rulemaking (NPRM) titled “Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act.” This proposal aims to:
– – Restore regulatory guidance in 29 CFR Part 791 for the FLSA.
– – Align the joint employer analysis for FMLA and MSPA with the FLSA standard (since those statutes incorporate FLSA’s employment definitions).
– – Provide a single, nationwide standard to reduce uncertainty, litigation, and circuit splits.
The NPRM proposes a four-factor balancing test (similar but not identical to the 2020 rule) to assess whether a potential joint employer (the entity that benefits from the work but is not the direct employer) is jointly liable. The factors examine 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.
4) Maintains the employee’s employment records.
No single factor is dispositive; the analysis considers the totality of the facts. If all four factors point the same way (toward or against joint employment), there is a “substantial likelihood” that outcome is correct. Additional factors may be relevant but are unlikely to override a unanimous result on the core four. The test allows consideration of reserved or indirect control in some contexts and economic dependence, but it emphasizes actual substantial involvement.
The proposal clarifies that certain business relationships alone (e.g., sharing a vendor or being franchisees of the same franchisor) do not establish joint employment without more direct ties to the specific employee’s work.
The 60-day public comment process for the Department of Labor’s (DOL) Notice of Proposed Rulemaking (NPRM) on Joint Employer Status Under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA) began with the NPRM’s publication and closes at 11:59 p.m. ET on June 22, 2026. The DOL encourages comments on all aspects of the proposal.
Submit comments at https://www.regulations.gov/docket/WHD-2026-0067. (Click the “Comment” or “Submit a Formal Comment” button on this docket page. You can also go directly to the comment form via the Federal Register page.)