--- title: "Labor department proposes new joint employer rule" url: https://burnaze.com/article/c6297514-13d8-45d1-8be0-a25c54208a93 source: "Nation's Restaurant News" original_url: https://www.nrn.com/restaurant-franchising/labor-department-proposes-new-joint-employer-rule author: "Lisa Jennings" category: "Franchise Industry" industry: "Franchise Industry" topics: ["Regulation & legal","Operations"] published: 2026-04-23T20:43:03.000Z modified: 2026-10-31T13:17:55.472Z image: https://eu-images.contentstack.com/v3/assets/bltea7aee2fca050a19/bltba20dad5a0099765/69ea858078284b79e7e415bb/DOL.jpg?width=1280&auto=webp&quality=80&disable=upscale --- # Labor department proposes new joint employer rule **TL;DR:** The U.S. Department of Labor has proposed a new national standard for joint-employer status, which would clarify labor laws and franchisor liability. The proposed rule aims to resolve differences in court opinions and provide clear guidance to employers. *By Lisa Jennings, originally published in Nation's Restaurant News on 2026-04-23. [Read the original](https://www.nrn.com/restaurant-franchising/labor-department-proposes-new-joint-employer-rule).* ## Key facts - DOL proposes new joint employer rule - Rule aims to clarify labor laws - 60-day comment period expires June 22 ## Story The U.S. Department of Labor (DOL) on Wednesday proposed a new rule that would create a national standard for what qualifies as “joint employer” status. The proposed rule under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act attempts to resolve significant differences in court opinions across the country about what employers are responsible for in terms of protecting wages and other rights of workers. The joint employer definition has been a stubborn issue for restaurant chains that franchise. The definition essentially determines what businesses are responsible for compliance with minimum wage, overtime and other labor laws. As a joint employer, for example, a restaurant franchisor could potentially be liable for wage-and-hour violations of franchisees. What qualifies as a joint employer relationship has shifted over the years amid changing National Labor Relations Board definitions and court challenges, and it now varies by region. Google, for example, reportedly has a case before the U.S. Court of Appeals for the Ninth Circuit that is expected to decide whether is a joint employer with Accenture Flex. ## Rule and regulations DOL officials argue the proposed rule will bring clarity and clear guidance to employers. Keith Sonderling, acting secretary of labor, said in a statement that the proposed rule also strengthens protections for workers. “This proposal helps us deliver on that promise. A clear standard on joint employment would give businesses more confidence to invest in partnerships, help employees understand their rights, and make the department’s investigations more efficient,” he said. DOL’s proposed rule, which was published in the Federal Register on Thursday, sets up a test to determine different standards that include “vertical joint employment,” and “horizontal joint employment,” with specific definitions for those terms. The multi-part test would consider things like who hires or fires the worker, who supervises or controls the workers' schedule and who determines the rate of pay. Attorneys say the proposed rule is similar to one finalized in 2020 by the first Trump administration, which would have established that employers must exercise actual control of workers to be considered joint employers. That rule was struck down by a New York federal court and then rescinded by the Biden administration in 2021. ## Industry reactions The International Franchise Association said DOL's new proposed rule would create a “commonsense, workable framework” for franchises to operate. “The Trump Administration’s joint employer rule provides a clear and commonsense approach for America’s 832,000 franchised businesses to operate and grow,” said Matt Haller, IFA president and CEO, in a statement. “This pro-franchise standard protects the independence of franchise small businesses, safeguards the equity franchisees have built in their local operations, and prevents the kind of regulated overreach that has threatened jobs and growth in previous administrations.” In addition to the DOL rule, the IFA has lobbied to support passage of the American Franchise Act, pending legislation that would codify the definitions that would determine joint employer status. Sean Kennedy, chief advocacy officer at the National Restaurant Association, agreed that the proposed rule would end years of regulatory whiplash around the joint employer standards. “This proposal signals a return to a framework grounded in longstanding legal precedent, focused on real day-to-day control over employment decisions,” said Kennedy in a statement. “Greater clarity would support responsible business relationships—especially franchising—and allow restaurants to invest, grow and create jobs.” DOL’s proposed rule has a 60-day comment period that expires on June 22, for those interested in submitting comments. ## Entities - Nation's Restaurant News (publication) - International Franchise Association (company) - Google (company) - Regulation (sector) - Matt Haller (person) - National Restaurant Association (company) - Lisa Jennings (person) - regulatory compliance (topic) - labor law (topic) - U.S. Department of Labor (regulator) - joint employer rule (topic) - Sean Kennedy (person) --- Originally reported by Lisa Jennings, Nation's Restaurant News (https://www.nrn.com/restaurant-franchising/labor-department-proposes-new-joint-employer-rule). Summarized by Burnaze (https://burnaze.com/article/c6297514-13d8-45d1-8be0-a25c54208a93).