NEWS | NLRB Reverts to 2020 Joint Employer Standard, DOL Proposes Corresponding Rule, Regulatory Uncertainty Continues for Small Business

NSBA continues urging the Administration to remember the regulatory burdens small-business owners face from the constant shift of definitions and rules, including the joint employer rule, commending leaders in Washington for pursuit of common sense standards best serving the nation's most important economic community.

MARCH 04, 2026 | The federal regulatory landscape for labor standards is shifting in a way that may bring greater clarity for small businesses.

On February 25, 2026, the National Labor Relations Board (NLRB) formally withdrew its 2023 joint employer rule and reinstated the 2020 joint employer standard under the National Labor Relations Act (NLRA).

This action codifies the status quo that had effectively been in place since a federal court vacated the 2023 rule before it ever took effect.

Under the reinstated 2020 standard, two companies are considered joint employers only if each exercises substantial direct and immediate control over essential terms and conditions of employment, such as wages, hiring, supervision, and work assignments.

Simultaneously, the U.S. Department of Labor (DOL) has published a new proposed rule that would rescind the Biden-era 2024 independent contractor regulation and codify a clearer test for determining whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

The proposed rule emphasizes a more predictable “economic reality” framework focused on key factors such as control and the opportunity for profit or loss, a standard viewed by many business groups as more administrable and aligned with common law principles.

What does this mean for small-business owners?

According to the Administration, the reinstated NLRB joint employer standard reduces the risk that franchisors, franchised businesses, staffing clients, and other enterprises will be deemed joint employers based on indirect authority alone.

It returns to a narrower framework that focuses on actual exercised control rather than theoretical or potential control.

The DOL’s proposed independent contractor rule seeks to clarify and stabilize worker classification criteria, potentially making it easier for businesses that rely on genuine independent contractors to operate with confidence.

Public comments and stakeholder feedback will shape how this rule is finalized, and you learn more on how to submit yours below and here.

Where does NSBA stand on this?

NSBA has long advocated for regulatory clarity and relief for small businesses facing shifting interpretations of joint employer and worker classification standards. NSBA supports policies that:

• Provide predictability and consistency for small employers in determining when contractor and franchise relationships could create employment liabilities.

• Restore standards grounded in actual control and economic reality, rather than broad, indeterminate tests that increase litigation and compliance costs.

• Ensure labor regulations protect workers while maintaining a regulatory environment conducive to small business growth and job creation, particularly in the gig economy and franchise sectors.

NSBA also supports legislative efforts like the Save Local Business Act, which would statutorily define “joint employer” in a manner consistent with the traditional direct control test, reducing regulatory uncertainty across federal statutes.

How can small-business owners get involved?

The DOL’s proposed rule is currently published in the Federal Register and open for public comment. Small-business owners and stakeholders are strongly encouraged to participate during the comment period to ensure their perspectives are considered before the rule is finalized:

• The public comment period runs through April 28, 2026. Comments must be submitted by 11:59 p.m. Eastern Time on that date to be considered timely.

• When submitting, include the Docket No. WHD-2026-0001 to ensure your comment is filed in the correct proceeding.

• Use clear, specific examples of how the proposed rule will affect your business operations, hiring practices, or workforce arrangements. Detailed, experience-based comments have greater impact.

• Explain whether your business relies on bona fide independent contractors and how the proposed factors affect classification.

• Highlight real challenges posed by past uncertainty in classification standards.

NSBA keeps members informed about key regulatory opportunities and often submits its own comments reflecting the collective needs of small businesses. Members may receive additional guidance on comment content and strategy.

NSBA will continue closely tracking these rulemakings and any subsequent legal challenges. Real, enforceable certainty in joint employer and worker classification standards is critical for small employers planning for growth, hiring, and compliance, and public participation during the rulemaking process is a key lever small businesses can use to shape outcomes that affect them most.