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...

The US Department of Labor just proposed a new rule to give businesses greater clarity and reduced liability around joint employer status under federal wage and hour law, and few industries will benefit as much as staffing. How the DOL defines joint employment has direct consequences on how you structure client relationships, negotiate service agreements, and manage your co-employment exposure. Here’s a quick recap of what the DOL just proposed and a staffing-specific guide for what this means for your business model. Quick Recap of New Joint Employer Proposal The DOL’s Wage and Hour Division released a proposal outlining a four-factor test to determine when two businesses are legally considered joint employers under the FLSA, FMLA, and MSPA. With no single factor being dispositive, the test examines whether: a business hires or fires the employee; supervises and controls their work schedule or conditions of employment to a substantial degree; determines their rate and method of payme...