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 | Advocacy
Oct 09, 2026
Podcast: 7.5% Mortgage Rates ‘New Normal’ Until Geopolitical Issues Resolved

On the latest episode of NAHB podcast Housing Developments, NAHB Chief Economist Dr. Robert Dietz joins CEO Jim Tobin and COO Paul Lopez to discuss the latest economic forecasts and how they have changed this year due to geopolitical turmoil.

IBS
Oct 08, 2026
IBS Remodeled Show Home Uses Holistic Approach to Boost Efficiency

The New American Remodel 2027 will be much more than a beautiful show home. It will highlight just how far building products and techniques have advanced in a relatively short period of time.

View all

Latest Economic News

Economics
Oct 09, 2026
Private Water and Sewer Systems in 2025 New Single-Family Homes

The share of new single-family homes built with individual wells and septic systems increased in 2025 compared to the previous year. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC), approximately 10% of single-family homes started in 2025 were served by individual (private) wells, and 17% relied on individual septic systems.

Economics
Oct 08, 2026
Remodeling Market Sentiment Remains Stable in Third Quarter Despite Headwinds

In the third quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 62, up one point compared to the previous quarter. The RMI has remained within a narrow band between 59 and 70 for the past four years.

Economics
Oct 07, 2026
ARM Share Increased as Mortgage Rates Spiked

Mortgage application activity declined as the 30-year fixed mortgage rate rose sharply. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, decreased 7.7% month-over-month in September on a seasonally adjusted basis. Compared to a year ago, total mortgage applications were lower by 35.4%.