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

Environmental Issues | Advocacy
Aug 06, 2026
Proposed Construction Stormwater Permit Aims to Provide Greater Clarity, Flexibility

The Environmental Protection Agency (EPA) has proposed a new Construction General Permit (CGP) that would replace the current federal permit when it expires in February 2027. Comments are due Sept. 2, and the EPA will hold a webinar Aug. 18 to review the proposed changes.

Economics
Aug 06, 2026
Multifamily Developer Confidence Weakens in Second Quarter

Confidence in the market for new multifamily housing weakened year-over-year in the second quarter, according to the Multifamily Market Survey (MMS) released today by NAHB. The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 43, down three points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down eight points year-over-year.

View all

Latest Economic News

Economics
Aug 07, 2026
U.S. Labor Market Softens in July

The U.S. labor market weakened in July, with nonfarm payrolls down 23,000 and downward revisions cutting another 103,000 jobs from May and June.

Economics
Aug 06, 2026
Multifamily Developer Confidence Weakens in Second Quarter

Confidence in the market for new multifamily housing weakened year-over-year in the second quarter, according to the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB). The MMS produces two separate indices.

Economics
Aug 06, 2026
Mortgage Rates Climb Again as Iran Conflict Re-escalates

Re-escalation of the conflict in Iran pushed mortgage rates higher in July. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.54% in July, up 5 basis points (bps) over June. Since the conflict in the Middle East began, the 30-year mortgage rate has climbed by almost 50 bps.