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

Safety

Mar 23, 2026

Roofing Safety in Home Building Starts at the Top

Roofing is an inherently dangerous job, with workers exposed to the elements at height on a pitched surface with few natural barriers. Due to this reality, it’s also the job with the most safety resources and products.

Advocacy

Mar 20, 2026

Hoosiers Score Big Housing Win

The Indiana Builders Association played a pivotal role in passing legislation to lower housing costs.

View all

Latest Economic News

Economics

Mar 19, 2026

New Home Sales Decline in January on Weather Disruptions

New home sales declined in January, reflecting typical monthly volatility as well as weather-related disruptions.

Economics

Mar 19, 2026

Fourth Quarter 2025 Multifamily Construction Data

According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts increased year-over-year during the fourth quarter of 2025.

Economics

Mar 18, 2026

Holding Pattern Continues for the Fed

The Fed continued its current pause for rate reductions at the conclusion of the March meeting of the Federal Open Market Committee, the central bank’s monetary policy body.