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

Economics

Feb 13, 2026

Existing Home Sales in January Plunged to Lowest Level Since 2024

Existing home sales in January fell to lowest level since August 2024 as tight inventory continued to push home prices higher and winter weather weighed on sales activity.

Economics

Feb 12, 2026

The Biggest Challenges Expected by Home Builders in 2026

According to the latest NAHB/Wells Fargo Housing Market Index, 84% of home builders felt the most significant challenge builders faced in 2025 was high interest rates and 65% anticipate interest rates will remain a problem in 2026.

View all

Latest Economic News

Economics

Feb 13, 2026

Inflation Eased in January

Inflation eased to an eight-month low in January, confirming a continued downward trend. Though most Consumer Price Index (CPI) components have resolved shutdown-related distortions from last fall, the shelter index will remain affected through April due to the imputation method used for housing costs. The shelter index is likely to show larger increases in the coming months.

Economics

Feb 12, 2026

Existing Home Sales Retreat Amid Low Inventory

Existing home sales fell in January to a more than two-year low after December’s strong rebound, as tight inventory continued to push home prices higher and winter storms weighed on activity. Despite mortgage rates trending lower and wage growth outpacing price gains, limited resale supply kept many buyers on the sidelines.

Economics

Feb 12, 2026

Residential Building Worker Wages Slow in 2025 Amid Cooling Housing Activity

Wage growth for residential building workers moderated notably in 2025, reflecting a broader cooling in housing activity and construction labor demand. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), both nominal and real wages remained modest during the fourth quarter, signaling a shift from the rapid post-pandemic expansion to a slower-growth phase.