One Worker, Two Employers? The DOL's Proposed Rule on Joint Employer Liability and What It Means for Eleventh Circuit Businesses
Joint employer status decides whether two businesses share legal responsibility for the same worker. The stakes run high. A company tagged as a joint employer can owe unpaid wages, overtime, and family leave to workers it never hired, never paid, and never met.
On April 22, 2026, the U.S. Department of Labor (DOL) proposed a new rule that aims to bring clarity to this murky area of employment law. The DOL’s stated goal is to establish a single, nationwide standard to reduce inconsistencies across circuits and provide clearer compliance guidance for multi-state employers. If finalized, the rule will reshape how courts in the Eleventh Circuit—and nationwide—analyze joint employer claims under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
The Current Confusion
Federal courts have applied conflicting joint employer tests for years. The Eleventh Circuit, which governs Alabama, Georgia, and Florida, uses an eight-factor analysis rooted in Aimable v. Long & Scott Farms (1994) and reaffirmed in Layton v. DHL Express (2012). That framework asks whether a worker is “economically dependent” on the alleged joint employer. Other circuits apply different frameworks. As a result, a business operating across state lines can face one outcome in Atlanta and a different outcome in Boston for the same staffing arrangement.
The DOL’s last attempt at a unified rule, issued during the first Trump administration, was rescinded by the Biden administration after a federal court struck down most of its provisions. The current proposal aims to address those deficiencies while retaining a structured, control-focused framework.
What the Proposed Rule Does
The proposal splits joint employment into two categories.
Vertical joint employment applies when a worker has a direct employer (a staffing agency, for example) but is also economically dependent on another business (the company where the worker actually performs the work). The DOL proposes a four-factor test asking whether the alleged joint employer:
Can hire or fire the worker;
Supervises and controls the worker’s schedule and conditions;
Sets the rate and method of pay; and
Maintains employment records.
If all four factors point the same way, joint employment is “substantially likely” either to exist or not. Mixed results require a deeper look at additional factors. No single factor is dispositive. The analysis remains fact-intensive and based on the totality of the circumstances, although the four core factors carry the greatest weight.
Horizontal joint employment applies when two related businesses share the same employee. The proposed rule confirms that two businesses do not become joint employers simply by sharing a vendor or operating under the same franchise brand. That clarification offers welcome relief to franchise operators and businesses that share back-office services.
The proposal also clarifies that actual, exercised control carries more weight than merely reserved or contractual control, although both remain relevant. For example, a contractual right to hire or fire that is never exercised will generally carry less weight than evidence that the business actually exercises that authority in practice.
Why It Matters in the Eleventh Circuit
The proposal extends to the FMLA and MSPA, statutes the prior rule never reached. Eleventh Circuit employers in agriculture, hospitality, logistics, and staffing should pay particular attention. Georgia, Florida, and Alabama all host substantial agricultural and seasonal workforces that fall within MSPA’s scope.
If finalized, the rule may narrow the gap between the Eleventh Circuit’s eight-factor test and the DOL’s four-factor framework. Federal courts often give weight to DOL regulations when statutory text is ambiguous, though they are not bound to follow them. Notably, recent Supreme Court precedent has reduced judicial deference to federal agency interpretations, meaning courts may apply the rule with less automatic deference than in the past. As a result, litigation over the rule’s validity and application is likely if it is finalized.
Practical Steps for Employers
Businesses that rely on staffing agencies, subcontractors, franchise networks, or shared corporate services should not wait for a final rule. Review existing relationships now. Audit who controls hiring, supervision, pay, and recordkeeping for each worker pool. Tighten contract language where the four factors point in unintended directions. Document the operational independence of vendors and subcontractors.
The comment period closes June 22, 2026. Stakeholders who want to influence the final rule should submit comments before that deadline.
If you have questions about how the proposed rule may affect your business or workforce arrangements, our employment litigation team is available to discuss.