Labor Department Issues Final Joint Employer Rule
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.
Latest from NAHBNow
May 21, 2026
NAHB Urges Congress to Advance Housing Supply ReformsTestifying today before the House Small Business Committee on how small builders can help close the nation’s housing gap, NAHB Chairman Bill Owens said the core issue is a shortage of housing.
May 21, 2026
Housing Affordability Edges Up in First Quarter but Challenges PersistWhile 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.
Latest Economic News
May 21, 2026
Single-Family Starts Fall Amid Economic Uncertainty and Affordability PressuresSingle-family housing starts declined in April as builders faced continued economic uncertainty and affordability challenges, including higher construction costs, ongoing labor shortages and elevated financing expenses. The latest housing starts and permits data suggest that the overall construction pipeline remains uneven across regions and property types.
May 21, 2026
Housing Affordability Edges Up in First Quarter but Challenges PersistWhile 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 National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index (CHI).
May 20, 2026
What It Takes to Leave Parental HomeAs 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.