The Department of Labor (DOL) on April 23, 2026, issued a Notice of Proposed Rulemaking (NPRM) that would provide regulatory guidance for determining joint employer status under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). According to DOL, joint employment generally arises in two contexts, commonly described as “vertical” or “horizontal.” In “vertical” joint employment, an employee is jointly employed by two or more employers that simultaneously benefit from the employee’s work. In “horizontal” joint employment, an employee works separate hours for two (or more) employers in the same workweek, and the employers are sufficiently associated with each other such that they are joint employers.

DOL is proposing to reinstate its 2020 final rule, which was rescinded in 2021, with a few changes. While its interpretation of horizontal joint employment remains relatively intact, DOL’s interpretation of vertical joint employment no longer limits the statutory basis to just the definition of “employer,” but also considers the definition of “employee” and “employ,” under the FLSA. The NPRM sets forth four factors relevant to determining whether a person or entity is a joint employer under vertical joint employment. These factors are whether the person: (1) hires or fires the employee; (2) supervises and controls the employee’s work schedule or conditions of employment to a substantial degree; (3) determines the employee’s rate and method of payment; and (4) maintains the employee’s employment records. DOL no longer is taking the position that it did under the 2020 final rule that an individual or entity must actually exercise one or more of the four enumerated factors to be a vertical joint employer; rather their power to do so may now be considered. Additional changes from the 2020 final rule include: allowing for the consideration of additional factors for vertical joint employment; no longer excluding any factors solely because they may relate to economic dependence on an employer for work; and no longer advising that allowing another employer to operate on its premises does not make joint employer status more or less likely under the FLSA.

The Department is also proposing to apply the FLSA analysis addressing joint employer status to the FMLA and MSPA since both statutes incorporate FLSA definitions regarding the scope of employment. Comments on the NPRM are due on June 22, 2026.