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
May 07, 2026
5 Important Contributions Home Builders Don't Get Enough Credit ForThe housing affordability conversation has many villains and very few heroes. Builders rarely make either list, which is part of the problem.
May 07, 2026
Multifamily Developer Confidence Holds Steady in First QuarterThe Multifamily Market Survey (MMS) released today by NAHB produced mixed results for the first quarter of 2026. The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 44, unchanged year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, down 13 points year-over-year.
Latest Economic News
May 07, 2026
Multifamily Developer Confidence Holds Steady in First QuarterThe Multifamily Production Index (MPI) had a reading of 44, unchanged year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, dropping 13 points year-over-year.
May 06, 2026
State-Level Employment Situation: March 2026State labor market conditions showed modest improvement in March, with job gains concentrated in several large states and the construction sector continuing to expand. However, employment declines across a number of states and mixed unemployment rate trends point to uneven momentum across regional economies.
May 06, 2026
Slight Rise for Open Construction Jobs in MarchThe number of open positions in the construction sector edged higher in March, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The current level of open jobs is down measurably from three years ago due to declines in construction activity, particularly in housing.