NEWS | NSBA Backs DOL Joint Employer Rule, Calls for Small Business Regulatory Stability

NSBA continues urging Congress, the Department of Labor (DOL), and entire administration to support commonsense regulatory policies best serving of small business, including the latest joint employer rule.

JUNE 23, 2026 | This week, NSBA submitted comments supporting the U.S. Department of Labor’s (DOL's) proposed rule on joint employer status under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA), while urging policymakers to address years of regulatory uncertainty that have burdened small businesses.

In comments filed June 22, NSBA praised the Department’s effort to restore a clearer and more predictable framework for determining joint employer status. The proposal would return to a 4-factor, actual-control analysis rooted in longstanding court precedent, providing small-business owners with a more straightforward standard for evaluating business relationships.

“Small businesses need rules they can understand and apply in real time,” NSBA President and CEO Todd McCracken wrote. “A nationwide, predictable standard is critical for sound business planning.”

NSBA highlighted several aspects of the proposal that would benefit small businesses, including its focus on actual rather than theoretical control and its recognition that ordinary business practices, such as franchising, subcontracting, staffing arrangements, and quality-control requirements, which do not automatically create joint employer liability.

NSBA also praised the DOL's effort to harmonize joint employer standards across the FLSA, FMLA, and MSPA, arguing that a single, consistent framework would reduce compliance costs and confusion for small firms that often lack dedicated legal and regulatory staff.

At the same time, NSBA emphasized that the joint employer standard has undergone repeated revisions over the last decade, shifting multiple times across presidential administrations. According to the association, this regulatory whiplash forces small-business owners to repeatedly reassess contracts, seek legal advice, and alter business arrangements, diverting resources away from hiring, wages, and growth.

The uncertainty also comes with a chilling effect on legitimate business relationships, as additionally noted by NSBA in the comments, discouraging some firms from pursuing franchising, subcontracting, and staffing partnerships due to concerns that future regulatory changes could alter their legal obligations.

While supporting the substance of the proposed rule, NSBA urged the DOL to work with Congress to codify the core elements of the joint employer standard into law. The association argued that statutory clarity would provide greater long-term certainty than administrative rulemaking alone, which remains vulnerable to reversal by future administrations.

NSBA also underscored how the proposed rule represents a significant step toward a more administrable and predictable framework for employers, workers, and regulators alike, while stressing that lasting stability will ultimately require congressional action.

“Small businesses deserve a durable standard they can rely on,” NSBA wrote, calling for a joint employer framework that supports growth, protects workers, and remains consistent across administrations.

Read the full comments here.

Review NSBA's previously submitted letters, comments, and testimonies here.

Watch this week's Hardwired for an update on the Joint Employer Rule from NSBA's Director of Government Affairs Jack Furth here.