Overview
- The National Labor Relations Board on February 26, 2026 issued a final rule rescinding its 2023 regulation and readopting the 2020 joint-employer standard.
- Under the reinstated rule, joint-employer status exists only where an entity actually exercises substantial, direct and immediate control over at least one essential term of employment.
- Essential terms are limited to eight categories, including wages, benefits, hours, hiring, discharge, discipline, supervision and direction, with indirect or merely reserved control insufficient on its own.
- The Board characterized the action as ministerial after a Texas federal court vacated the 2023 rule in 2024, and legal challenges continue, including an SEIU case in Washington, D.C.
- On the same day, the Labor Department proposed replacing its 2024 independent-contractor rule with a modified 2021 economic-dependence test, as Congress considers the American Franchise Act to further clarify joint-employer standards.