Compliance Stuff

The US Department of Labor’s (DOL) Wage and Hour Division recently announced a proposed rule that would establish a standard for determining joint-employer status under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) . The proposed rule seeks to harmonize the joint-employment framework by i mplementing a uniform standard across these three federal statutes. Notably, the 60-day comment period ended on June 22, 2026 . In Depth Under the FLSA, joint employers are “jointly and severally liable” for compliance with the statute’s requirements, including overtime pay . The proposed rule distinguishes between vertical and horizontal business relationships, establishing a separate standard for determining joint-employer status for each scenario . Vertical joint employment exists when an employee is “jointly employed by two or more employers that simultaneously benefit from the employee’s work” ...

Key Takeaways: The DOL is moving toward a more predictable and control-focused framework. In determining joint-employer status, the proposed rule emphasizes actual control over employees and work conditions rather than broader or more expansive theories. Franchise and business-to-business relationships receive meaningful protection. The proposal expressly recognizes the DOL’s longstanding position that certain business models, such as the franchise model, do not themselves indicate joint-employer status. The DOL is attempting to harmonize inconsistent standards across federal law. The DOL repeatedly notes that federal appellate courts currently apply differing joint-employer standards and that the absence of regulatory guidance has created uncertainty for businesses, workers, and courts. The U.S. Department of Labor (DOL) has issued a proposed rule (Joint-Employer Status Under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultur...