On April 23, 2026, the U.S. Department of Labor issued a proposed rule to narrow when two businesses are treated as 'joint employers' under the Fair Labor Standards Act. It targets arrangements involving staffing companies, franchisor-franchisee relationships, vendor-supplier setups, and contractor-subcontractor chains. The SBA's Office of Advocacy flagged the rule as significant for small businesses in a May 6, 2026 post.
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DOL proposes narrower joint-employer liability rule
Why this matters for founders
If you use a staffing agency, run a franchise, or rely heavily on subcontractors, joint-employer status determines whether you can be held liable for another company's wage-and-hour violations. A narrower test generally reduces your exposure, but the rule is only proposed — watch for the final version before assuming it applies. Review your staffing and franchise contracts now so you know where liability sits today.
Source: SBA Office of Advocacy
Construction & TradesFood & BeverageLocal ServicesProfessional Services #joint-employer#labor-law#staffing#franchise#wage-and-hour#legal#compliance#hiring
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