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
Jun 26, 2026
Meet Robert Wood, the 2025 NAHB Remodeler of the YearWhen Robert Wood and his wife Heather first started their company Mountainwood Homes back in 2008, one of their goals was to win a national award. That goal was achieved at the 2026 International Builders’ Show in Orlando, when Robert was named NAHB’s Remodeler of the Year.
Jun 25, 2026
Custom Builder Transforms a Tuscan Time Capsule Into a Modern Showpiece for IBS 2027When the International Builders’ Show returns to Las Vegas in 2027, attendees will get a firsthand look at how an aging luxury residence can be transformed into a contemporary showpiece.
Latest Economic News
Jun 26, 2026
Property Tax Revenue Leads State and Local Tax Growth in Q1 2026Property tax revenue collected by state and local governments was higher in the first quarter of 2026 according to the Census Bureau’s quarterly summary of state and local tax revenue.
Jun 25, 2026
State-Level Economic Growth Strengthened in the First Quarter of 2026State economic growth strengthened in the first quarter of 2026, with real GDP increasing in 46 states and the District of Columbia. According to the Bureau of Economic Analysis (BEA), state-level growth rates ranged from a 4.5% annualized increase in Washington to a 1.6% decline in South Dakota, while Delaware’s economy was essentially unchanged during the quarter.
Jun 25, 2026
PCE Inflation Hits 3-Years High in MayAs the Iran conflict pushed up energy prices, the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve’s preferred inflation gauge—accelerated to a three-year high in May.