The Department of Labor has proposed a nationwide joint employer standard. Employment attorney Burt Garland of Ogletree Deakins breaks down the four-factor test — and what employers should do before it’s final.
If your organization uses staffing agencies, subcontractors, or franchise arrangements, the Department of Labor just proposed a rule that determines when you could be legally responsible for workers you don’t directly employ. The proposed joint employer rule, announced April 22, would set a single nationwide standard under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act — and the public comment window closes June 22.
To make sense of what’s actually changing, Phil Brandt sat down with Burt Garland, shareholder at employment law firm Ogletree Deakins and a recurring voice on This Week at Work, for a plain-language walkthrough of the proposal: what the test looks like, where the risk really lives, and what to do while the rule is still in draft.
What’s Inside
1. What the DOL’s Proposed Joint Employer Rule Changes
2. The Four-Factor Test for Joint Employment
3. Where Joint Employer Risk Shows Up Day to Day
Joint employment means two or more employers share legal responsibility for the same worker — and when it applies, both employers are on the hook for wages, overtime, and FMLA obligations. The DOL’s proposal is its first attempt to define that standard since 2021, when the prior rule was rescinded after a federal court largely struck it down. As Burt put it, this issue has swung with every change in administration, and the new proposal is designed to settle it by aligning with what federal courts have already been doing.
The rule covers two distinct situations. Vertical joint employment is one worker serving two employers at once — the classic staffing agency placement, where the agency employs the worker and the client company directs the work. Horizontal joint employment is one worker logging separate hours for two related employers in the same workweek — think two restaurant concepts under common ownership. In horizontal cases, the hours from both jobs must be combined for overtime purposes, and both employers share liability.
One piece of genuinely good news is built into the proposal: common business arrangements don’t create joint employer status on their own. Operating as a franchisor, requiring compliance with health and safety standards, enforcing brand quality controls, or providing sample handbooks and benefit plans — none of these, standing alone, makes joint employment more likely. A franchisor requiring uniforms and food-prep standards isn’t thereby employing the franchisee’s workers.
For vertical joint employment — the scenario most employers will encounter — the proposal sets out a four-factor test. The question is whether the potential joint employer:
No single factor decides the outcome. The analysis is holistic, based on the realities of the working relationship — though a unanimous finding across all four factors in either direction creates a strong likelihood one way or the other.
The most meaningful shift from the 2020 rule: a company’s reserved right to control a worker now counts in the analysis, even if that control is never used. But the rule is clear that actually exercising control matters more. That nuance is where most employers’ day-to-day practices will be tested.
The risk here isn’t abstract. It shows up in ordinary decisions managers make every week.
Take a scenario Phil raised from his own HR career: negotiating pay rates with a temp agency so you can attract the right skills. That maps directly to factor three — determining the worker’s rate and method of pay. Or the frontline supervisor who directs a temp worker’s daily tasks and trains them alongside your employees — that’s factor two in action. These are normal, defensible business practices, but under the proposed rule, each one adds weight to a joint employer finding.
Even the way a temp assignment ends carries risk. Burt drew the line clearly: a client supervisor who tells a staffing agency worker “you’re done, don’t come back” is exercising direct control. The safer path is telling the agency the placement isn’t working and letting the agency handle the conversation. Same outcome, very different legal posture.
“It’s not always feasible, but it’s always a best practice for the staffing agency to have its own on-site manager at the location.”
— Burt Garland, Shareholder, Ogletree Deakins
That on-site manager becomes the channel for everything that would otherwise look like control: discipline runs through them, removal requests run through them, and the client company stays on the right side of the line.
Start with your contracts. Review your arrangements with staffing firms, subcontractors, franchisees, and other partners, and get clear on who actually does the hiring, the supervising, and the paying — and who keeps the employment records. Where the answers point toward your organization, that’s where to tighten practices: route discipline and removal requests through the agency, document each partner’s independent operations, and train frontline supervisors on where the control line sits.
Consider weighing in. The proposal is in its public comment period through June 22, 2026. Employers can submit comments directly to the DOL through Regulations.gov (Docket WHD-2026-0067), or work with counsel to craft feedback on how the four-factor test would play out in their real-world arrangements. Comments genuinely shape final rules — this is the window to be heard.
Hold the proposal loosely. The DOL itself notes that the rule, if finalized, guides its own investigators — it doesn’t bind judges. Burt connected this to the Supreme Court’s Loper Bright decision, which means court interpretations now carry more weight than agency rules. His read: the proposal largely synthesizes what courts have already been doing, which is reason for cautious optimism that the standard may finally hold steady.
“Employers should view the proposal as informative rather than definitive.”
— Burt Garland, Shareholder, Ogletree Deakins
Joint employer liability has whipsawed across three administrations, and employers have absorbed the cost of every swing. This proposal won’t end the debate, but it’s grounded in court precedent rather than cutting against it — which gives it a better chance of stability than its predecessors.
In the meantime, the work is practical: know your arrangements, know who holds control, and put clean processes around the places where the lines blur. This is the same posture that serves employers well on every fast-moving compliance front — like the wearable technology questions Phil and Burt worked through recently: get ahead of it while it’s still cheap to do so.
The proposed joint employer rule rewards employers who know exactly how their staffing, contractor, and franchise relationships actually operate — not how the contract says they operate. The four factors are knowable, the risky habits are fixable, and the comment window is open until June 22.
If you’d like a second set of eyes on a staffing or contractor relationship, AAIM members can connect with their HR Advisor or reach the Solutions Team at solutions.team@aaimea.org — and Aaime Hart is available on the AAIM website anytime. Not yet a member? Learn more about AAIM membership.
What is the difference between vertical and horizontal joint employment?
Vertical joint employment is one worker serving two employers at once — typically a staffing agency and the client company directing the work. Horizontal joint employment is one worker logging separate hours for two related employers in the same workweek, like two restaurants under common ownership. In horizontal cases, hours from both jobs combine for overtime calculations.
Does being a franchisor make a company a joint employer?
Not by itself. The proposed rule states that franchise arrangements, brand quality standards, required compliance with legal or safety obligations, and shared resources like sample handbooks don’t establish joint employer status on their own. What matters is whether the franchisor actually controls hiring, firing, pay, scheduling, or records for the franchisee’s workers.
Is the DOL’s joint employer rule final?
No. It’s a proposed rule in its public comment period, which closes June 22, 2026. Even once finalized, it serves as interpretive guidance for DOL enforcement — courts can apply their own joint employer analysis.
How can employers comment on the proposed joint employer rule?
Submit comments through Regulations.gov under Docket WHD-2026-0067 by 11:59 p.m. ET on June 22, 2026, either directly or through legal counsel. The DOL reviews all comments before deciding whether and how to finalize the rule.
Want to Hear the Full Conversation?
Phil and Burt go deeper on the real-world temp agency scenarios — including the right way to handle a placement that isn’t working out — plus Burt’s take on why the pendulum may finally stop swinging. Watch or listen to the full episode of This Week at Work.
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