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

Aug 03, 2026

Median Lot Prices Reach Record Highs in Several U.S. Regions

Lot values of new single-family homes in the Pacific, Mountain, Middle Atlantic and East North Central Census Divisions reached all-time highs.

Advocacy

Jul 31, 2026

How to Advocate for Housing in Your Home District

NAHB members can build on the recent success of the June Legislative Conference by meeting with lawmakers in their home districts this August to discuss key issues affecting the home building industry.

View all

Latest Economic News

Economics

Jul 30, 2026

PCE Inflation Eased in June

After reaching a three-year high last month, the Federal Reserve’s preferred inflation gauge eased in June following declines in energy prices amid a temporary truce with Iran. This marked the first monthly decline in six years.

Economics

Jul 30, 2026

Top Ten Builder Share Across Largest Housing Markets

An earlier post described how the top ten builders in the country accounted for 43.6% of new single-family closings in 2025. BUILDER magazine has now released additional data on the top ten builders within each of the 50 largest new home markets in the U.S., ranked by single-family permits.

Economics

Jul 29, 2026

Amid Supply-Side Inflation Pressures, The Fed Holds

The Federal Reserve held the federal funds rate at a target range of 3.5% to 3.75% at the conclusion of its July policy meeting. There were three dissenting votes on the Federal Open Market Committee (FOMC), all of which supported raising the federal funds rate by 25 basis points.