On April 22, 2026, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced a proposed rule to clarify how joint employer status is determined under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

This is a Notice of Proposed Rulemaking (NPRM) and does not change employer obligations unless and until a final rule is issued.

This update applies to employers with multi-entity staffing or contracting arrangements. Comments may be filed on Regulations.gov (Docket WHD–2026–0067; RIN 1235–AA48) from April 23, 2026, to June 22, 2026, by 11:59 p.m. ET.

What Employers Need to Do

1) Decide Whether to Submit a Comment (and Plan for Internal Review): The NPRM was published in the Federal Register on April 23, 2026, which is when the formal comment period begins.

• Comments must be received by June 22, 2026.
• The Wage and Hour Division’s NPRM page states the deadline as 11:59 p.m. ET on June 22, 2026.

2) Submit Comments Correctly (RIN and Docket Identifiers): Employers (and any interested party) should identify submissions with RIN 1235–AA48 and Docket No. WHD–2026–0067.

3) How to Submit Comments (Electronic and Mail Options): The Federal Register provides two submission methods:

• Electronic Submission
  • Submit comments through https://www.regulations.gov
  • Follow the instructions in the docket and include the identifiers above.

• Mail Submission
  • Address written submissions to: Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S–3502, 200 Constitution Avenue NW, Washington, DC 20210

4) Protect Confidentiality Because Comments Become Public: the WHD warns that any comment submitted—including duplicates—will be posted publicly on Regulations.gov without change, and any personal information included will be publicly visible.

It also notes that comments collected and submitted by a third-party organization may be posted as a group under a single document ID on Regulations.gov (including any personal information provided).

5) Make Comments Easier to Process (Practical Formatting Tip): The Department advises that uploading text-recognized attachments can help the Department search and retrieve content during review.

6) After the Comment Period Closes: After June 22, 2026, the WHD will review comments before deciding whether and how to issue a final rule.

Overview

1) Align the Joint-employer Approach Across Three Statutes: The Department frames the NPRM as creating a single nationwide standard grounded in federal court precedent to improve clarity and consistency in an area where tests can vary across jurisdictions. The NPRM would align the joint-employer analysis in the FMLA and MSPA regulations with the Department’s FLSA analysis, as both statutes incorporate the FLSA’s statutory employment definitions.

2) Where the Guidance Would Appear in the Regulations: The NPRM proposes to clarify joint-employer status under the Fair Labor Standards Act at 29 C.F.R. Part 791 and proposes related amendments in 29 C.F.R. Parts 500, 780, and 825.

3) Two Frameworks: “horizontal” vs. “vertical” joint employment: The proposed rule separates analysis into horizontal and vertical scenarios.

• Horizontal Joint Employment focuses on whether employers are sufficiently associated with respect to the same employee’s employment.

• Vertical Joint Employment focuses on whether, as a matter of economic reality, more than one entity jointly employs the same worker in a vertically structured relationship (e.g., staffing, subcontracting, franchising).

4) Horizontal Joint Employment: “sufficiently associated,” with boundary lines: The NPRM states that certain relationships alone—such as sharing a vendor or being franchisees of the same franchisor—are insufficient by themselves to establish horizontal joint employment when the relationship has little to do with employing the specific employees at issue.

5) Vertical Joint Employment: The Four-factor Analysis: For vertical joint employment, the NPRM proposes a four-factor analysis examining whether the potential joint employer: (1) hires or fires the employee; (2) substantially supervises or controls the employee’s schedule or conditions of employment; (3) determines the employee’s rate and method of pay; and (4) maintains the employee’s employment records.

The NPRM also states that a unanimous finding on the four factors in either direction would establish a “substantial likelihood” regarding whether joint-employer status exists.

6) Reserved vs. Exercised Control: The NPRM explains that reserved control may be considered, but exercised control is more indicative than a merely reserved right that is never used in practice.

7) Factors and Practices the NPRM Says Should Not Drive the Determination (Standing Alone): The NPRM excludes factors relevant only to employee-versus-independent-contractor analysis (e.g., special skill, opportunity for profit/loss, investment in equipment/helpers). It also identifies certain common business practices that, standing alone, do not make joint employment more or less likely (e.g., compliance-related contractual requirements such as safety and anti-harassment protocols; providing sample handbooks/forms; association benefit plans; joint apprenticeship participation; franchising/brand agreements; and quality control standards).

8) Liability Consequences (Including Explicit Family and Medical Leave Act Exposure): The Department explains that when joint employment exists, employers may be jointly and severally liable for wages, damages, and other relief under the FLSA, including overtime calculations based on total hours worked for all joint employers in a workweek. The WHD Q&A also explains how joint employment affects FMLA coverage and employee eligibility counting and outlines “primary employer” responsibilities for notices, leave, and benefits (with job restoration potentially implicating a secondary employer in some circumstances).

9) Scope Limitation (Not the National Labor Relations Act Standard): The WHD Q&A states that this rulemaking affects only the FLSA, the FMLA, and MSPA and has no effect on the National Labor Relations Act (NLRA), which is interpreted and enforced by the National Labor Relations Board (NLRB).

Why This Matters

• Joint Employment Can Expand Liability: When joint employment exists, all joint employers may be responsible for ensuring workers receive the correct wages and protections owed, and hours worked across joint employers can be combined for overtime.

• This NPRM Aims to Reduce Inconsistency: The Department states the proposal is intended to provide a clearer nationwide standard informed by federal court precedent in an area where standards vary across circuits.

• It Affects More Than Wage-and-hour Issues: The WHD Q&A explains that joint employment has consequences under the FMLA and MSPA, which can matter to employers operating in multi-entity arrangements beyond wage and overtime questions.

Key Risks for Employers

• Overtime and Back-pay Exposure Through Hour Aggregation: If joint employment is found, total hours worked for all joint employers in a workweek can be used to determine overtime entitlement.

• Family and Medical Leave Act Exposure: The WHD Q&A states joint employment affects coverage and eligibility counting and assigns core responsibilities to the primary employer, with job restoration potentially involving a secondary employer in some situations.

• Contract language and “Reserved Control” Can Still Create Risk: The NPRM states that reserved control is relevant (though less indicative than exercised control), meaning reserved authority in contracts may still contribute to joint-employer risk depending on the overall facts.

• Operational Practices are the Main Risk Driver in Vertical Relationships: The NPRM’s four-factor vertical test concentrates on hiring/firing, substantial supervision/schedule control, pay determination, and recordkeeping—areas where businesses may unintentionally step into joint-employer territory.

• Public Disclosure Risk From Submitted Comments: WHD warns that comments are posted publicly on Regulations.gov without change (including any personal information), and third-party “campaign” submissions may be posted as a group under a single ID.

• Uncertainty Until a Final Rule is Issued: This is a proposed rule; it may change after comment review and will not be binding unless a final rule is published.

Source Reference

• DOL – Press Release (April 22, 2026)
• Rulemaking Docket – ID WHD-2026-0067 – RIN 1235-AA48 – Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act
• DOL NPRM – Notice of Proposed Rule: Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act, RIN 1235-AA48 (Aprill 22, 2026)
• Federal Register (April 23, 2026) – Docket No. WHD-2026-0067 – RIN 1235-AA48 – Notice of proposed rulemaking (DOL)

Resources

• DOL FAQs – NPRM: Joint Employer Status Under the FLSA, FMLA, and MSPA (April 22, 2026)

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