The U.S. Department of Labor's April 22, 2026 Notice of Proposed Rulemaking (NPRM) introduces a unified national joint employer standard spanning the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). For employers and businesses that rely on contingent or staffing-based workforces, the proposal represents a meaningful recalibration of liability exposure under federal wage, leave, and migrant worker protections. With the public comment period closing on June 22, 2026, the window to influence the contours of this framework is narrowing.
A central feature of the proposal is its structural distinction between two categories of joint employment. Horizontal joint employment addresses situations in which two or more associated employers share or coordinate the employment of the same worker. Vertical joint employment, by contrast, addresses arrangements in which a worker is engaged through an intermediary or staffing relationship, and a second entity may nonetheless be deemed a joint employer of that worker. By formalizing this dual framework, the DOL offers businesses clearer analytical categories against which to evaluate their existing relationships, contracts, and operational practices.
The proposal further specifies that vertical joint employer status will be evaluated through a four-factor test. The factors examine: (1) control over hiring and firing; (2) supervision of work conditions; (3) determination of pay; and (4) the maintenance of employment records. These factors are particularly significant because they translate directly into practical compliance levers. Decisions about contract terms with staffing providers, the allocation of supervisory authority on-site, payroll and rate-setting practices, and recordkeeping responsibilities should all be reviewed now in light of how each factor may be weighed under the unified standard.
Employers, staffing agencies, agricultural operations, and businesses with layered service arrangements should consider whether to submit comments before the June 22, 2026 deadline. Beyond the rulemaking process, prudent organizations will use this period to audit workforce structures, revisit indemnification and control provisions in vendor contracts, and document the operational realities that align with their intended employment posture.
This article is for general informational purposes only. Clients facing specific questions about joint employer exposure should seek tailored legal advice based on their individual circumstances.