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

Sponsored Content

Dec 23, 2025

The 5 Types of Builders — and the One Built to Prosper

Most builders want the same things: predictable profits, less stress, and a business that doesn’t grind them down year after year.

Construction Costs | Material Costs

Dec 23, 2025

Lumber Capacity Has Peaked for 2025

An annual revision to the Federal Reserve G.17 Industrial Production report shows current sawmill production levels above 2017 by 7.5%, but just 0.3% above 2023 levels.

View all

Latest Economic News

Economics

Dec 22, 2025

State-Level Employment Situation: September 2025

In September 2025, nonfarm payroll employment was largely unchanged across states on a monthly basis, with a limited number of states seeing statistically significant increases or decreases. This reflects generally stable job counts across states despite broader labor market fluctuations. The data were impacted by collection delays due to the federal government shutdown.

Economics

Dec 19, 2025

Existing Home Sales Edge Higher in November

Existing home sales rose for the third consecutive month in November as lower mortgage rates continued to boost home sales, according to the National Association of Realtors (NAR). However, the increase remained modest as mortgage rates still stayed above 6% while down from recent highs. The weakening job market also weighed on buyer activity.

Economics

Dec 18, 2025

Lumber Capacity Lower Midway Through 2025

Sawmill production has remained essentially flat over the past two years, according to the Federal Reserve G.17 Industrial Production report. This most recent data release contained an annual revision, which resulted in higher estimates for both production and capacity in U.S. sawmills.