Labor Department proposes narrower joint-employer rule, easing Target contractor liability

If a Target store’s overnight cleaning crew, outside security team or delivery contractor misses overtime pay, the question of who owes the money could get narrower under a new Labor Department proposal.

The department proposed the rule on April 22 and published it in the Federal Register the next day. It would revise joint-employer analysis under the Fair Labor Standards Act, the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act, with the Labor Department saying it wants a single nationwide standard because federal courts have been split. The public comment period runs 60 days and closes at 11:59 p.m. EDT on June 22.

For Target, the change would not relieve the company of its own payroll duties to store, supply-chain or corporate employees. It would affect the legal environment around outsourced labor, where retailers rely on outside cleaning, construction, security, delivery and installation crews. Under the department’s framework, when a joint employment relationship exists, both employers can be jointly and severally liable for wages, damages and other relief, including overtime premiums for all hours worked.

The proposal would also restore FLSA guidance the department says had not been meaningfully revised in more than 60 years before the 2020 rulemaking. The fact sheet says the simultaneous-benefit test would focus on four factors: whether a business actually has the power to hire or fire, supervise and control schedules or conditions of employment, determine pay and maintain employment records. Business models, business practices and contractual language alone would not decide joint-employer status.

That matters for Target’s store operations because the line between a direct team member and a vendor worker is not always obvious on the sales floor. For ETLs and team leads, the practical issue is keeping complaints, scheduling, supervision and documentation pointed to the correct employer, even when the work is happening under one roof. The department said the new standard is meant to simplify compliance, reduce litigation and help workers understand their rights.

The policy fight is moving in the same direction as other federal labor changes this year. In February, the National Labor Relations Board repealed a Biden-era joint-employer rule and returned to a more restrictive Trump-era test. The International Franchise Association praised the Labor Department proposal, saying it offered a clear standard for America’s 832,000 franchised businesses, while labor groups such as the AFL-CIO and the National Employment Law Project have long argued that broader rules are needed so workers like janitors and temps can recover unpaid wages from larger companies that benefit from their labor. Acting Secretary Keith Sonderling and Wage and Hour Division Administrator Andrew Rogers both framed the proposal as a way to strengthen worker protections while making the rules easier to follow.