DOL Updates
DOL Proposes New Joint Employer Standard
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APPLIES TO All Employers |
EFFECTIVE TBD |
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Discussion
On April 22, 2026, the U.S. Department of Labor (DOL) published a proposed rule that would establish a new standard for determining when two or more employers may be jointly liable for violations of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
Under the proposed rule, joint employer status would be determined by evaluating whether a potential joint employer:
- Hires or fires the employee;
- Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
- Determines the employee’s rate and method of payment; and
- Maintains the employee’s employment records.
The DOL included several practical examples in the proposal to illustrate how these factors should be applied. In one example, an office park company contracts with a janitorial services company to clean its building after hours. The office park agrees to pay the janitorial company a fixed fee, reserves the right to supervise the janitorial employees, but does not set their pay rates or individual schedules and does not actually exercise its supervisory authority. Under the proposed rule, the office park would not be a joint employer because it does not hire or fire the janitorial employees, determine their rate or method of payment, or exercise actual control over their conditions of employment.
Relationship to Prior Joint Employer Standards
The proposed rule is not entirely new. The Trump administration issued a nearly identical joint employment rule in 2020, which was repealed by the Biden administration in 2021, leaving a regulatory gap that was subsequently filled by court decisions. However, the 2026 proposal differs from the 2020 version in two key respects.
First, while the 2020 rule required that an employer actually exercise one or more of the four factors to qualify as a joint employer, the 2026 proposal softens this requirement, instead providing that control that is actually exercised carries more weight than control that is merely reserved but rarely or never exercised. Second, the 2026 proposal would replace the current FMLA joint employment regulation with a reference to the new FLSA joint employment analysis, creating a unified standard across the three covered statutes.
It is also important to note that a separate joint employment standard applies under the National Labor Relations Act (NLRA) for labor relations purposes. That standard is more stringent than the proposed FLSA/FMLA/MSPA standard, meaning that unionized employers or employers facing organizing activity could be found to be joint employers under the NLRA even if they would not qualify as joint employers under the DOL’s proposed rule.
The DOL’s comment period for the proposed rule is set to close on June 22, 2026, after which the DOL will consider feedback and revise the proposal as necessary.
Action Items
- Continue to monitor the rulemaking process.
- Review potential joint employer relationships with legal counsel.
DOL Proposes Regulations to Clarify ERISA Plan Fiduciary Duties
On April 7, 2026, the DOL published proposed regulations intended to clarify the duties of ERISA plan fiduciaries when selecting alternative assets as designated investment alternatives in participant-directed individual account plans, including 401(k) and 403(b) plans. “Alternative assets” include, but are not limited to, private equity, real estate, digital assets, commodities, and infrastructure investments. The proposed regulations create “safe harbor” conditions and propose that courts give significant deference to fiduciary determinations. However, they do not eliminate the underlying ERISA obligations to act prudently in selecting and monitoring investment alternatives, ensure suitability for plan participants, and address liquidity risks associated with alternative assets. Even so, and in light of the Supreme Court’s 2024 Loper Bright decision eliminating Chevron deference, there is no guarantee that courts will defer to either the DOL’s interpretation of ERISA or a fiduciary’s reliance on the safe harbor. Plan fiduciaries should consult ERISA counsel on these regulatory developments and the ongoing obligations associated with plan investment decisions.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase