So, hiring: you write up a short job description, post the opening on all the various job boards, do some interviews, and then hire the perfect candidate. Pretty simple, right? Well, yes and no. In the abstract, hiring is a pretty straightforward process. When you really get down to it, though, there are several different legal and administrative processes and decisions that your business will need to go through to stay compliant and onboard your employees the correct way. Of course, this can get confusing pretty quickly, and in-depth knowledge on labor laws isn’t exactly something that can be acquired in a day, so your hiring process can quickly become stressful and time-consuming.
At Payday HCM, we’re familiar with the difficulties that come along with the hiring process, especially when it comes to understanding all the various aspects that go into hiring an employee—whether it be full-time, part-time, seasonal, or otherwise. And, with the Department of Labor recently announcing a new proposed rule aimed at streamlining the joint employer status as defined by the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act, it raises the question: What exactly is joint employment?
Well, in this article, we’ll be covering just that: what joint employment and joint employers are, and what businesses need to know about them. We’ll start by covering the situations in which businesses might find themselves needing to understand joint employment rules before diving into the specifics of what joint employment is. Then, we’ll cover how joint employment works, as well as how it applies to specific labor laws like the FLSA or FMLA.
In this article, you will learn:
- What is Joint Employment?
- When Do Businesses Become Joint Employers?
- How Does Joint Employment Work?
What is Joint Employment?
First up, we’ll start by defining what joint employment is and why different rules and regulations have been set to define it.
Defining Joint Employment
Joint employment occurs when two or more employers share legal responsibility for the same employee. In these situations, each employer is responsible for ensuring the worker receives the wages, protections, and benefits required under the law. This definition aligns across major labor laws like the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), where joint employers can be held accountable for compliance.
It’s important to note that simply having multiple jobs does not qualify as joint employment. Instead, the employers must be separate entities that are connected through the worker’s employment, typically through shared control or benefit from the work being performed. We’ll get into some examples of what this looks like a little further down.
Why Joint Employment Exists
In today’s business environment, many employers aren’t strictly working with employees who are full-time employed by their business. Given the rise of things like staffing agencies and businesses continually relying on more outside contractors, understanding joint employment—and having a set definition—has become crucial.
In these arrangements, more than one business may influence how work is performed or benefit from that work. Because of this shared involvement, the law recognizes joint employment to ensure that employees still receive full protections, even when responsibilities are split across organizations (as well as to clarify for the employers who is responsible for what).
When Do Businesses Become Joint Employers?
Now that we understand more about what joint employment is, we can look a bit deeper at the factors that determine whether an employer is in a joint employer situation.
Key Factors That Determine Joint Employment
There is no single rule that automatically defines joint employment. As mentioned above, joint employment isn’t simply when an employee has more than one job. There’s a particular emphasis on both employers in some sense benefiting and having control over the employee’s services.
In recent years, the fixed rules that determine joint employment status have changed a few times. As of April 2026, the current determining factors come from a ruling by the National Labor Relations Board, outlining that joint employment occurs if two or more entities have an employment relationship with an employee or employees and if each entity shares or codetermines things like:
- Wages, benefits, and other compensation.
- Hours of work and scheduling.
- Assignment of duties to be performed.
- Supervision of the performance of duties.
- The tenure of employment.
- Working conditions related to the safety and health of employees.
The DOL’s proposed rule would change these criteria, establishing two different categories of joint employment: horizontal and vertical. Horizontal joint employment would be a more intensive form of joint employment, where related employers share an employee’s hours. Vertical joint employment would describe a less joint approach on behalf of the employers, where one employer directly employs the worker and another benefits from the work.
Common Joint Employment Scenarios
Joint employment can arise in a variety of business structures, particularly when responsibilities overlap. Common examples include:
- Staffing agencies and client companies, where one employs the worker and the other directs daily work
- Contractor and subcontractor relationships, especially in industries like construction
- Franchise systems, where operational control may extend beyond a single entity
- Shared employee arrangements, such as businesses with common ownership or coordinated operations
Determining whether or not a certain employee relationship exists within a joint employment scenario largely comes down to assessing who is responsible for an employee’s pay, schedule, duties, and length of employment. Keeping these key factors in mind can help you determine whether a certain scenario constitutes joint employment.
How Does Joint Employment Work?
With this more in-depth understanding of joint employment, we can now look more closely at how joint employment is defined under different labor laws and its effects on compliance.
Wage, Hour, and Leave Responsibilities
Once joint employment is established, all employers share responsibility for compliance under applicable labor laws. Of course, these different labor laws outline different responsibilities that would fall upon each joint employer. Under the FLSA, employers are jointly and severally liable for wages owed, and all hours worked across employers must be combined to determine overtime eligibility.
Under the FMLA, the employee must be counted by all joint employers when determining eligibility. One employer will be designated as the primary employer, making them responsible for things like providing leave, maintaining health benefits, and restoring the employee to their position. However, the secondary employer must still comply with FMLA rules and cannot interfere with employee rights.
Shared Risk and Compliance Considerations
Speaking of the secondary employer not interfering with an employee’s rights, one of the most critical aspects of joint employment is shared liability. Even if one employer fails to meet legal obligations or maintain compliance with certain labor laws, the other can still be held accountable.
This shared responsibility is designed to protect employees, ensuring they receive proper pay and benefits regardless of how business relationships are structured. For employers, this means clearly defining roles and responsibilities, maintaining accurate payroll and employment records, and ensuring compliance across all involved entities is a must.
Employ Your Knowledge of Joint Employment
Compliance can be confusing, especially when it comes to understanding the nuances and complexities of different labor laws and regulations. FLSA, FMLA, ACA—whichever acronym-ending-in-A you may be looking at, there are plenty of different opportunities for your business to fall behind when it comes to compliance. This is especially true for those who are engaged in a joint employment relationship with some of their employees, as this arrangement can raise a lot of questions as to who is responsible for what. Luckily, with the information provided in this article, you’ll be able to approach joint employment compliance with confidence.
Full-time and part-time are just the beginning of the employment puzzle. There are dozens of other pieces that employers need to know in order to stay compliant, as well as to ensure you’re staffing your business in a way that benefits both you and your employees. Things like joint employment, seasonal employment, and at-will employment are all interconnected—just like full-time and part-time employment—but each share their own unique differences. Check out our article on a full breakdown of at-will employment, as well as our other article on seasonal employment.
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