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

Workforce Development

Apr 17, 2026

9 NHE Grants Boost Residential Construction Visibility

The National Housing Endowment (NHE), NAHB's philanthropic arm, created its Homebuilding Education Leadership Program (HELP) to increase the number of qualified graduates entering the home building industry. Since 2009, HELP has invested more than $6.2 million in grants to 60 colleges and universities.

Economics

Apr 16, 2026

Iran War Adds to Economic Headwinds

A multidimensional supply shock is weakening the U.S. economy, fueled by the delayed effects of the 2025 trade wars and tariffs, elevated oil prices, and persistent policy uncertainty. NAHB Chief Economist Dr. Robert Dietz provides a high-level summary of key economic markers.

View all

Latest Economic News

Economics

Apr 17, 2026

Count of Second Homes Declines in 2024

In 2024, the number of second homes in the U.S. was 6.2 million, accounting for 4.3% of the nation’s housing stock, according to NAHB estimates. This reflects a modest decline from 2022, when the number reached 6.5 million. This decline suggests some cooling following the pandemic-era surge in second home demand.

Economics

Apr 16, 2026

Young Adults Report More Interest in the Construction Trades: 2026 Survey

NAHB estimates the U.S. has a structural housing deficit of 1.2 million units. Among the myriad of headwinds home builders face trying to close that gap is the industry’s chronic shortage of workers in the construction trades.

Economics

Apr 15, 2026

Builder Sentiment Posts Notable Decline on Economic Uncertainty

Economic uncertainty coupled with rising building material costs and interest rates resulted in a sharp decline in builder sentiment in April as the housing market enters into the heart of the spring buying season.