# Joint Employment

> Joint employment is a situation where two separate businesses share enough control over the same worker's terms and conditions that both are treated as employers in law, making each of them liable for wage, hour and other employment obligations toward that worker.

Joint employment arises when a worker is, in practice, employed by more than one business at the same time. Rather than one clear employer, two organisations share or co-determine the essential terms of the job, such as pay, hours, supervision or discipline. When that happens, employment law can treat both as employers and hold each responsible.

The concept matters most in staffing, franchising, subcontracting and outsourcing, where one company supplies or manages workers who also answer to another. If the arrangement crosses the line into joint employment, liabilities such as unpaid wages, overtime and certain labour law duties can attach to both businesses, not just the one that signs the cheque.

Where the line sits is set by each country and, in the United States, has shifted with successive rules. The test turns on how much control a business holds over the worker, so the safest position is to understand exactly which employment terms you influence in any shared-workforce arrangement.

## What makes two businesses joint employers?

Shared or co-determined control over the essential terms of the work. If both businesses influence things like pay rates, hours, scheduling, supervision, hiring or firing for the same worker, each can be treated as an employer. The precise threshold varies by country and by which law is being applied.

## What is the current US joint-employer standard?

For labour relations, the operative standard requires a business to possess and exercise substantial, direct and immediate control over essential terms of employment. A broader 2023 rule that would have captured reserved or indirect control was struck down by a federal court in 2024 and formally withdrawn, so the narrower 2020 standard applies.

## How does an Employer of Record affect joint-employment risk?

An Employer of Record becomes the sole legal employer of the worker in that country, which gives a clear single answer to who the employer is. You direct the work, but the EOR holds the employment relationship, so the arrangement is structured to avoid the ambiguity that creates joint-employment exposure.

## Key facts

- **US NLRB joint-employer standard (2026):** The NLRB's 2023 joint-employer rule was vacated by a federal court in March 2024 and formally withdrawn in 2026; the 2020 standard, requiring direct and immediate control, remains operative. (Source: National Labor Relations Board, verified 2026-07-28)

## Joint employment vs a single legal employer

|  | Joint employment | EOR (single legal employer) |
| --- | --- | --- |
| Who is the employer? | Two businesses share employer status | One entity is the sole legal employer |
| Wage and hour liability | Can attach to both businesses | Sits with the EOR |
| Common setting | Staffing, franchising, subcontracting | Employing abroad with no local entity |
| Certainty over obligations | Depends on how control is shared | Defined by the employment contract |

## Frequently asked questions

### Is joint employment illegal?

No. Joint employment is a status, not an offence. The risk is not the arrangement itself but the obligations that come with it: if two businesses are joint employers, both can be held liable for things like unpaid wages or overtime, sometimes unexpectedly.

### Can I become a joint employer of my staffing agency's workers?

You can, if you exercise enough control over their working conditions. Setting pay, directing day-to-day work, or controlling schedules and discipline for agency workers can be enough, depending on the jurisdiction and the specific law, to make you a joint employer alongside the agency.

### Does joint employment apply outside the United States?

Yes, though the label and tests differ. Many countries have their own doctrines for when more than one entity is responsible for a worker, particularly in subcontracting and labour-supply chains. The core question is consistent: who actually controls the terms and conditions of the work.

### How is joint employment different from co-employment?

They overlap but are not identical. Co-employment usually describes a planned, contractual split of employer duties, as in a PEO arrangement. Joint employment is a legal finding that two businesses share employer responsibility, which can arise whether or not either party intended it.

## Sources

- [NLRB's Joint-Employer Rule Vacated by U.S. District Judge](https://www.nlrb.gov/news-outreach/news-story/nlrbs-joint-employer-rule-vacated-by-us-district-judge), National Labor Relations Board
- [Withdrawal of 2023 Standard for Determining Joint Employer Status](https://www.federalregister.gov/documents/2026/02/27/2026-03955/withdrawal-of-2023-standard-for-determining-joint-employer-status), Federal Register

_Last updated 2026-07-28. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/joint-employment_