Washington, D.C. — Nursing homes that rely on staffing agencies to fill their workforce gaps are facing a new layer of legal uncertainty, after the U.S. Department of Labor proposed a sweeping overhaul of the rules that determine when two employers share responsibility for the same worker.
The department’s Wage and Hour Division announced the proposed rule on April 22, establishing a unified national standard for “joint employer” status under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. A public comment period runs through June 22.
Why nursing homes are paying attention
The term “joint employer” matters a lot in long-term care. Many skilled nursing facilities don’t hire aides, nurses, and therapists directly — they contract with staffing agencies that supply workers on an as-needed basis. Under joint employer rules, a facility could be found legally responsible, alongside the agency, for ensuring those workers receive minimum wages, overtime pay, and protections under federal leave law.
Until now, federal courts across the country have applied different standards to decide when that co-responsibility kicks in. The new rule would create a single test, based on four factors: whether the facility hires or fires the worker, controls the work schedule or conditions to a substantial degree, determines the rate and method of pay, and maintains employment records.
“A clear standard on joint employment would give businesses more confidence to invest in partnerships,” said Acting Secretary of Labor Keith Sonderling.
Two types of joint employment
The rule distinguishes between two scenarios — “vertical” and “horizontal” joint employment.
Vertical joint employment is the scenario most relevant to nursing homes. It’s the situation where a staffing agency supplies workers but the facility exercises meaningful day-to-day control over those workers. If inspectors find a facility closely supervising a temp worker’s schedule and conditions — even if the agency cut the paycheck — the facility could be on the hook as a co-employer.
Horizontal joint employment, by contrast, applies when a worker splits time between two facilities that are connected to each other and those hours need to be combined for overtime purposes.
The department was careful to note that exercising control is more significant than simply reserving the right to control. Contractual boilerplate that technically allows oversight but isn’t actually used is unlikely to create joint employer status under the new framework.
A familiar fight with a new twist
This isn’t the first time the Trump administration has tried to nail down a joint employer rule. A nearly identical regulation from 2020 was struck down in federal court. DOL officials say this version addresses those legal vulnerabilities, though critics have already signaled it tilts toward protecting facilities rather than workers.
For nursing home operators, the rule’s promise is clarity — a consistent national standard replaces a patchwork that has made compliance expensive and unpredictable. For agency workers, the stakes run in the opposite direction: the clearer the standard, the easier it is for a facility to structure its contracts in ways that legally distance itself from co-employer liability.
Staffing levels at nursing homes improved significantly in 2025, but the industry still leans heavily on agency workers to fill gaps — which makes this rulemaking anything but theoretical for most operators.
The proposed rule is open for public comment until June 22, 2026.
