Labor Department Issues Final Joint Employer Rule

Codes and Standards
Published

The Labor Department (DOL) yesterday announced a final rule to provide a clearer methodology for determining joint employer status. The rule will provide employers clarity and certainty regarding their responsibility to pay federal minimum wage and overtime for all hours worked over 40 in a workweek.

Where an employee performs work for the employer that simultaneously benefits another individual or entity, the Labor Department provides a four-part test to determine whether the potential joint employer actually exercises the power to:

  • Hire or fire the employee;
  • Supervise and control the employee’s work schedules or conditions of employment;
  • Set the employee’s pay rate and method of payment; and
  • Maintain the employee’s employment records.

Whether a person is a joint employer will depend on all the facts in a particular case. Additional factors may also be relevant in determining whether another person is a joint employer in this situation, but only when they show whether the potential joint employer is exercising significant control over the terms and conditions of the employee’s work.

The new rule will take effect on March 16. It includes a set of joint employment examples to further assist in clarifying joint employer status.

“This final rule furthers President Trump’s successful, government-wide effort to address regulations that hinder the American economy and to promote economic growth,” said Secretary of Labor Eugene Scalia.

NAHB welcomes the rulemaking from DOL's Wage and Hour Division as two other federal agencies similarly seek to narrow their definitions of joint employment. Under the broader interpretations utilized by the Obama administration, builders faced uncertainty about what level of necessary oversight and coordination of their subcontractors might trigger joint employer liability.

For more information, contact David Jaffe.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economics | Housing Affordability

May 21, 2026

Housing Affordability Edges Up in First Quarter but Challenges Persist

While housing affordability remains out of reach for millions of Americans, particularly first-time and entry-level buyers, conditions have improved modestly in the last year, according to the latest data from the NAHB/Wells Fargo Cost of Housing Index (CHI). The CHI results from the first quarter of 2026 show that a family earning the nation’s median income of $106,800 needed 32% of its income to cover the mortgage payment on a median-priced new home.

Economics

May 21, 2026

Single-Family Starts Fall Amid Economic Uncertainty and Affordability Pressures

Overall housing starts decreased 2.8% in April to a seasonally adjusted annual rate of 1.47 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

View all

Latest Economic News

Economics

May 20, 2026

What It Takes to Leave Parental Home

As of 2024, one in five adults aged 25-34 lives with parents or in-laws. NAHB’s analysis of the latest American Community Survey (ACS) Public Use Microdata Sample (PUMS) evaluates a wide range of socioeconomic and demographic factors that shape young adults’ path to independence.

Economics

May 19, 2026

Who Drives Remodeling Spending?

Residential remodeling is an important and growing sector of the housing market, particularly as elevated mortgage rates and limited housing inventory encourage many homeowners to improve their existing homes rather than move.

Economics

May 18, 2026

Builder Sentiment Posts Gain in May but Significant Affordability Challenges Persist

Builder confidence posted a modest gain in May even as buyers grapple with rising mortgage rates and economic uncertainty while builders continue to contend with elevated land, labor and construction costs.