DOL revives joint-employer rule that could hit subcontracted drivers
Proposed rule published April 23 sets test for when a motor carrier becomes joint employer of a fleet contractor's drivers — opening wage-and-hour liability.
The Department of Labor published a proposed rule April 23 that revives a framework for determining when a worker has two employers — a question that matters in trucking whenever a motor carrier subcontracts to a fleet with employee drivers. The rule, posted in the Federal Register, is open for comment and addresses both vertical joint-employer relationships (subcontracting) and horizontal relationships (separate employers in the same workweek).
When does a motor carrier become the joint employer of a subcontractor's drivers?
The proposed rule sets a test for vertical joint employment — the scenario where a motor carrier contracts with a fleet contractor that employs drivers, and the question becomes whether the motor carrier is the joint employer of those drivers. According to the Scopelitis law firm, which sent a client alert the day the rule was posted, this vertical test is the most relevant piece for trucking companies that rely on subcontracted capacity.
A vertical joint-employer finding would expose the motor carrier to Wage & Hour division enforcement actions tied to the subcontractor's drivers — minimum wage violations, overtime disputes, misclassification claims — even though the carrier does not directly employ those drivers. The DOL's Wage & Hour division enforces the Fair Labor Standards Act, which governs minimum wage and overtime.
What happened to the first Trump administration's joint-employer rule?
The first Trump administration implemented a Wage & Hour division rule on joint-employer status, but a court later struck it down. The April 23 proposed rule is DOL's second attempt to create a durable framework. The Federal Register notice does not specify an effective date — the rule is in proposed form and the comment period must close before DOL can finalize it.
What is a horizontal joint-employer relationship?
A horizontal employment relationship, according to the DOL's Federal Register post, exists "where an employee works separate hours for two (or more) employers in the same workweek that are sufficiently associated with each other with respect to the employment of the employee." This scenario is less common in trucking than vertical subcontracting, but it could apply when a driver works for two affiliated carriers in the same week.
Why subcontracting makes this rule matter for trucking
Trucking relies heavily on subcontracting. A motor carrier with its own authority often brokers loads to smaller fleets or owner-operators, and those smaller fleets may employ drivers rather than lease owner-operators. If DOL's final rule sets a low bar for joint-employer status, the motor carrier at the top of the chain could be held liable for wage violations committed by the subcontractor — even if the carrier never directly controlled the driver's schedule, pay rate, or dispatch.
The Scopelitis alert noted that the proposed rule's structure for vertical joint employment is "of most relevance" to motor carriers that contract with fleet contractors employing drivers. The firm did not specify the rule's test criteria in the portion of the alert excerpted in the source, but the implication is that carriers need to evaluate how much control they exercise over subcontracted drivers — dispatch instructions, load assignments, equipment requirements, and performance monitoring could all factor into a joint-employer determination.
What compliance steps should carriers take now?
Carriers that subcontract to fleets with employee drivers should review their contracts and operating procedures before the rule is finalized. Key questions: Does the carrier set the driver's hours? Does the carrier require the driver to use specific equipment or follow specific routes? Does the carrier monitor the driver's performance through telematics or scorecards? Each layer of control increases the risk of a joint-employer finding.
Carriers should also document that subcontractors are responsible for their own payroll, workers' compensation, and wage-and-hour compliance. If a Wage & Hour investigator opens a case, the carrier will need to show a clear separation between its role as a customer and the subcontractor's role as the employer.
The proposed rule is open for public comment. Carriers and trade groups have an opportunity to submit comments on the DOL's test for vertical joint employment before the rule is finalized. The American Trucking Associations and state trucking associations typically file comments on rules that affect subcontracting and independent-contractor classification.
What happens if a carrier is found to be a joint employer?
If DOL determines that a motor carrier is the joint employer of a subcontractor's drivers, the carrier becomes jointly and severally liable for any wage-and-hour violations tied to those drivers. That means DOL can pursue the carrier for back wages, liquidated damages, and civil penalties — even if the subcontractor was the party that actually shorted the driver's pay. Joint and several liability allows DOL to collect the full amount from whichever party has deeper pockets, and motor carriers typically have more assets than small fleet contractors.
The proposed rule does not change the test for independent-contractor classification under the Fair Labor Standards Act — that is a separate question governed by a different DOL rule. The joint-employer rule addresses situations where the worker is already classified as an employee of one entity, and the question is whether a second entity also qualifies as an employer.
