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The U.S. Small Business Administration’s Office of Advocacy has formally expressed support for the U.S. Department of Labor’s (DOL) proposed rule revising the definition of “joint employer” under the Fair Labor Standards Act (FLSA), highlighting the effort as an important step toward greater clarity and consistency in federal labor standards.

The DOL issued its proposed rule on April 23, 2026, seeking to establish a revised framework for determining when multiple entities may be considered joint employers under the FLSA. The proposal is intended to provide a more uniform federal standard for assessing employment relationships across industries.

On June 22, 2026, the Office of Advocacy submitted public comments in response to the proposed rule, commending the Department of Labor for moving toward a clearer and more predictable regulatory approach. Advocacy emphasized that a consistent federal definition of joint employer status would provide greater certainty for small businesses navigating complex employment arrangements.

  • Emphasis on Clarity and Uniformity – In its comments, the Office of Advocacy praised the proposed rule’s effort to create a single, uniform federal standard, noting that such consistency is critical for reducing regulatory uncertainty and compliance burdens on small employers. Advocacy underscored that clarity in the joint employer standard is particularly important for small businesses that operate through franchises, subcontracting relationships, or staffing arrangements. To inform its position, the Office of Advocacy convened a roundtable of small business stakeholders representing a range of industries. Participants provided feedback on how joint employer determinations affect hiring practices, operational flexibility, and legal exposure.
  • Stakeholder Recommendations – Based on input from the roundtable, Advocacy recommended that the Department of Labor refine and finalize the rule in a way that:
  • Clearly defines and limits “reserved” and “indirect” control provisions; and 
  • Restricts the joint employer analysis to the four enumerated primary factors outlined in the proposed framework. 
  • Advocacy participants stressed that narrowing the scope of analysis would help ensure predictability in enforcement and reduce ambiguity that can lead to inconsistent interpretations across jurisdictions.

The Department of Labor’s joint employer rule remains under review following the public comment period, and further revisions may be made before a final rule is issued. Stakeholder engagement, including input from small business representatives, is expected to play a central role in shaping the final regulatory framework.