On April 22, the U.S. Department of Labor’s (DOL) Wage and Hour Division announced a proposed rule to address joint employer status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. Joint employment is a concept that applies when two or more businesses share control over an employee’s working conditions. The proposal aims to establish a single and clearer nationwide standard to help resolve legal uncertainty for determining when two or more employers are jointly liable for wages, overtime, and other worker protections. If finalized, the DOL’s proposed rule would be the agency’s first joint employer regulation since the Biden administration rescinded the prior joint employer rule in 2021.
The proposed rule includes a few important key factors:
- Advises that horizontal joint employment exists when separate employers are sufficiently associated with respect to the employment of the same employee, but that business relationships which have little to do with the employment of specific employees—such as sharing a vendor or being franchisees of the same franchisor—are alone insufficient to establish joint employment.
- Adopts a four-factor analysis for use in every case of potential vertical joint employment, examining whether the 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.
It also explains that additional factors may be relevant in assessing vertical joint employment, but that a unanimous finding on the four factors in either direction would establish a "substantial likelihood" regarding whether an individual or entity is a joint employer with another. Further information, including a FAQ, can be found on the DOL’s Wage and Hour Division site here.
This proposal could create joint employer-defined relationships based on the staffing model a LTC provider has, including agency and contract staff usage. It is also important to mention that there are several states that apply their own, often stricter, joint employer standards than what are included in this proposed rule. Long term care centers should review their staffing, subcontracting and any franchise arrangements with legal counsel to ensure they are meeting both federal (and should this proposed rule be enacted into law) and state laws.
The Department encourages interested parties to submit comments on this proposal. The 60-day comment period closes on June 22, 2026. AHCA/NCAL is reviewing the proposal in depth and plans to comment. Contact AHCA’s Associate VP of Workforce & Constituency Services at dritchie@ahca.org if any comments or questions on this matter.