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

Jul 09, 2026

Remodeling Market Sentiment Remains in Positive Territory in Second Quarter

NAHB released the NAHB Remodeling Market Index (RMI) for the second quarter, posting a reading of 61. Although the reading inched down one point from the previous quarter, it is still in positive territory and has remained in the low 60s consistently over the past year.

Sustainability and Green Building

Jul 08, 2026

Enhance Your Next Land Development Project with the NGBS

The newly released ICC 700-2025 National Green Building Standard (NGBS) defines the benchmark for sustainable residential construction, renovation and land development. Not only does it provide best practices for the design, planning, construction and certification of land development projects, it also evaluates community design, infrastructure and environmental preservation independent of the actual buildings constructed.

View all

Latest Economic News

Economics

Jul 09, 2026

Existing Home Sales Slowed in June

After reaching a five-month high last month, existing home sales pulled back in June as record-high home prices and elevated mortgage rates weighed on buyers. This monthly volatility reflects the sensitivity of home buyer demand to mortgage rate changes.

Economics

Jul 09, 2026

Remodeling Market Sentiment Remains in Positive Territory in Second Quarter

In the second quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 61, down one point compared to the previous quarter. The RMI has remained in the low 60s consistently over the past year.

Economics

Jul 08, 2026

Mortgage Activity Flat in June, ARM Share Decreases

Mortgage applications stalled in June as higher mortgage rates dampened market activity. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, stayed relatively unchanged with a marginal decrease of 0.3% month-over-month on a seasonally adjusted basis.