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
Jan 26, 2026
The Future of Plumbing Codes and DesignFindings from a recent study by Drexel University about plumbing flow rates suggests future plumbing codes should pivot toward establishing updated hydraulic performance requirements, which haven't been touched in decades.
Jan 23, 2026
Download the IBS App to Get Ready for OrlandoThe mobile app for the 2026 International Builders’ Show (IBS) is now available to download from the Apple App Store or Google Play. You can search for “IBS 2026,” or access the links at buildersshow.com/app.
Latest Economic News
Jan 23, 2026
2025 Third Quarter State-Level GDP DataIn the third quarter of 2025, the Bureau of Economic Analysis (BEA) reported that real gross domestic product (GDP) expanded nationally, with growth recorded across all states and the District of Columbia.
Jan 22, 2026
House Prices Decline in Local Markets Despite National GrowthNationally, house prices continued to rise at a modest pace in the third quarter of 2025, as mentioned in our previous quarterly house prices post. However, this national trend masks significant variation across local markets. While many metro areas continued to see house price appreciation, others experienced notable declines following several years of rapid growth.
Jan 21, 2026
Private Residential Construction Spending Edges Higher in October on Home ImprovementsPrivate residential construction spending was up 1.3% in October, rebounding from a 1.4% decline in September 2025. This modest gain was primarily driven by increased spending on home improvements.