The National Employment Law Project, in a formal comment filed with the U.S. Department of Labor, is demanding the agency withdraw its proposed rule narrowing the joint employer standard under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act.

The proposed rule, published in the Federal Register on April 23, 2026, would create a narrower test for determining when a joint employment relationship exists. For employers, that change touches a core compliance question: who bears legal liability for wage and hour violations, FMLA obligations, and MSPA protections when work is performed by subcontracted or staffing-agency labor. If adopted, the rule would make it harder to hold large companies that use subcontractors liable for violations committed against those workers.

NELP filed its comment jointly with Governing for Impact in the rulemaking docket (WHD-2026-0067). The group argues the proposal contradicts both statutory text and decades of court precedent.

The stakes for contingent workforces

The joint employer concept has historically made both a staffing agency and the company that uses its workers potentially responsible for violations of workplace laws. NELP illustrates the point with a concrete scenario: an assembly line worker who regularly logs overtime but has never been paid for it. If a staffing agency hired her — not the manufacturer that owns the plant — the manufacturer has nonetheless historically shared liability.

The DOL's proposed rule would loosen that shared accountability. NELP warns that workers in already precarious sectors would likely see deteriorating working conditions and face greater difficulty enforcing their rights.

The group also predicts a structural consequence for how employers organize their workforces: the rule would likely encourage companies to increase their use of outsourcing.

The legal argument

In its comment, NELP contends that the FLSA, FMLA, and MSPA all use broad language precisely so that employers who engage subcontracted labor cannot easily evade accountability when workers' rights are violated. The Supreme Court and circuit courts across the country have repeatedly affirmed that broad reading when assessing joint employment liability.

On that basis, NELP argues the DOL's proposal runs contrary to the statutes themselves and to settled court precedent — a framing that suggests any final rule could face immediate legal challenge.

Outsourcing trends already raising red flags

NELP points to outsourcing growth in janitorial, construction, and warehousing as evidence the standard matters in practice. In those industries, the group says, workers have faced more wage and hour violations and more health and safety violations as subcontracting and outsourcing have expanded.

The comment closes with a principle that frames the policy debate for HR leaders weighing staffing models: workers deserve a strong joint employment standard to enforce their legal rights to the full extent of the law, regardless of who signs their paychecks. NELP's bottom-line demand is direct — the DOL must withdraw the proposed rule.

Whether the agency heeds that call or finalizes the rule, employers that rely on staffing agencies and subcontractors will need to reassess contract terms, indemnification clauses, and compliance monitoring as the definition of joint employment shifts.