Joint Employment, Misclassification, I-9s, and Web Accessibility: New Rules and Rulings Reshape Employer Risk

What employers should know about key developments this week:

DOL Proposes Joint Employer Rule: The Department of Labor (DOL) has proposed a rule reinstating the economic realities test for joint employer liability under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act, prompting employers with subcontractors, franchises, or subsidiaries to assess their exposure before the June 22 comment deadline.
Fifth Circuit: Misclassification Alone Isn't Enough: The U.S. Court of Appeals for the Fifth Circuit upheld a verdict denying overtime pay to a misclassified worker, finding that, under the FLSA, an employer cannot be liable for overtime of which it had no knowledge.
I-9 and Accessibility Rules Tighten: Immigration and Customs Enforcement has reclassified nearly all Form I-9 errors as uncorrectable "substantive" violations subject to significant fines. Separately, health care organizations receiving Department of Health and Human Services funding face a May 11 web accessibility deadline that is not covered by the Department of Justice's recent Americans with Disabilities Act Title II extension.

Joint Employment, Misclassification, I-9s, and Web Accessibility: New Rules and Rulings Reshape Employer Risk
Play
May 6, 2026

Transcript

[00:00:03] George Whipple: Welcome to Employment Law This Week. I’m George Whipple. The DOL proposes a joint employer rule - The Department of Labor announced a proposed rule for determining joint employer liability. New in this rule: it determines joint employer status not only under the Fair Labor Standards Act, but also under the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act.

[00:00:35] The proposed rule is primarily a return to 2020 joint employment standards, with some clarifications to address circuit court rulings. The rule reinstates the economic realities test, focusing primarily on direct, exercised control, but it does leave room for consideration of “reserved control” that has not been exercised by the employer.

[00:01:01] The rule also re-opens the door to “indirect control” using the pre-2020 “sufficiently associated” standard, but includes new guidance stating that certain relationships, such as sharing the same vendor or a franchisee relationship, are not, on their own, sufficient. Employers with subcontractors, franchises, or subsidiaries could be particularly affected by the DOL’s proposed rule.

[00:01:33] The comment period will close June 22. The Fifth Circuit denies overtime pay despite worker misclassification - The circuit court upheld a jury verdict finding a worker who was misclassified as an independent contractor was not entitled to overtime pay. The court's reasoning centered on a key FLSA requirement: an employer is only liable for overtime if it knew the employee was working outside of regular hours. In this case, the employee—who was misclassified—was not required to track or report his time. Thus, the employer had no knowledge of any overtime worked. Finally this week, two compliance actions of note for employers.

[00:02:24] Immigration and Customs Enforcement released a fact sheet reclassifying Form I-9 errors that were previously considered technical or procedural failures such as failing to date Section 1, failing to print the employer's complete name and title in Section 2, or forgetting to sign and date the certification.

[00:02:46] Almost any omission or mistake on these forms will now be considered substantive errors. “Substantive” errors cannot be corrected and subject employers to potentially hefty fines. Employers should review and audit their documents, processes, and procedures that could be affected by this change. And the DOJ has extended compliance deadlines for its 2024 ADA Title II web accessibility rule for state and local governments.

[00:03:20] However, employers should note that healthcare organizations receiving HHS funding must still comply with HHS's web and digital accessibility standards by next Monday, May 11. The extension does not apply to those organizations. That’s it for this week. Thanks for watching. We’ll see you next time.

In Case You Missed It

Critical Infrastructure at Risk: Project Glasswing Urges Attention to AI-Driven Cyber Risks, Workforce Bulletin

Maine Restricts Non-Competes for Health Care Practitioners, Trade Secrets & Employee Mobility

NLRB Could Soon Have a Three-Person Republican Majority, Employment Law This Week

About Employment Law This Week

For employers navigating risk, workforce, and the bottom line. Employment Law This Week® delivers the employment and labor developments that matter—without the noise. Part of the Epstein Becker Green Insights Network.

Your Workforce. Our Business.®
As a trusted leader in U.S. employment law, Epstein Becker Green supports employers from a variety of industries in mitigating risks, safeguarding reputations, and enhancing bottom lines. Learn more about our employment, labor, and workforce management services.