The Trump administration has issued a proposed regulation that would revise the standard used to determine whether two companies are “joint employers” of the same worker under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. If finalized, the rule would make it somewhat more difficult for the government and workers to establish joint employment—a development with notable implications for franchisors, though relatively modest ones for the staffing industry.

The centerpiece of the proposal is a shift in emphasis from the right to control a worker to the actual exercise of that control. Under the new framework, a company would not be deemed a joint employer simply because it retained the contractual authority to direct or supervise workers—it would need to actually do so in practice. For staffing firms and their clients, this change is unlikely to significantly alter the legal landscape. Joint employment has long been a recognized and well-established feature of the temporary staffing relationship. Staffing firms and their clients have generally operated with the understanding that a form of joint employment exists, and responsible firms structure their relationships accordingly.

The rule is still in the proposed stage and subject to a public comment period before it can be finalized. ASA will continue to monitor developments and engage in the regulatory process as appropriate. Members with questions about how joint employment principles apply to their specific client relationships are encouraged to consult with employment counsel.