Sponsors (3)
The bill creates clearer, more predictable rules about who counts as an employer—reducing litigation and preserving FLSA definitions for many workers—at the cost of narrowing workers' and unions' ability to hold upstream firms accountable for labor violations and recover relief.
Workers who clearly meet FLSA definitions (including many transportation and gig workers) keep federal wage-and-hour protections because the bill preserves the FLSA's employee/employer definitions.
Employers, third-party staffing firms, and courts get clearer legal boundaries for who is an employer, reducing uncertainty in overlapping-employer situations.
Businesses and agencies have a more predictable standard for determining employer responsibility, which can lower litigation and compliance costs for employers (especially small businesses).
Gig and contract workers may lose the ability to hold upstream or contracting firms liable for labor violations, reducing avenues to recover unpaid wages or other remedies.
Labor unions and workers supplied through subcontractors could face higher barriers to organizing or bargaining with lead firms, weakening collective bargaining leverage.
Employees who rely on joint-employer findings to obtain back pay or benefits may have reduced prospects for relief, leaving workers uncompensated or shifting costs onto smaller subcontractors and social safety nets.
Based on analysis of 2 sections of legislative text.
Tightens the joint-employer test so each employer must directly, actually, and immediately exercise significant control over essential employment terms to be a joint employer.
Official title: To clarify the treatment of 2 or more employers as joint employers under the National Labor Relations Act and the Fair Labor Standards Act of 1938.
Introduced July 14, 2025 by James Comer · Last progress July 14, 2025
Changes the legal test for when two businesses are treated as "joint employers" under major federal labor laws so that joint-employer status requires direct, actual, and immediate exercise of significant control over essential terms and conditions of employment (hiring, firing, pay, supervision, schedules, discipline). The change narrows when separate entities can be held jointly responsible for workers and makes the FLSA joint-employer standard explicitly subject to the NLRA test while preserving the FLSA definitions of "employee" and "employer."