The standard for determining who’s a joint employer has changed, due to a final rule from the National Labor Relations Board (NLRB).
The current NLRB rule, put in place in 2020 under the Trump Administration, says that businesses will be considered joint employers if they have direct and immediate control over one or more essential terms and conditions of employment of another entity’s employees.
The new rule rescinds and replaces the old one.
According to the Biden-era standard, an entity may be deemed a joint employer of another employer’s employees if the two share or codetermine the employees’ essential terms and conditions of employment.
That’s bad news, because the new rule makes it more likely you’ll be considered a joint employer and therefore be held liable if another entity violates the National Labor Relations Act (NLRA).
Essential terms and conditions
The recently issued final rule contains an exhaustive list of what essential terms and conditions are.
- wages, benefits and other compensation
- hours of work and scheduling
- the assignment of duties to be performed
- the supervision of the performance of duties
- work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline
- the tenure of employment, including hiring and discharge, and
- working conditions related to the safety and health of employees.
Regarding the authority to control the essential terms and conditions of employment, it doesn’t matter whether or not such control is exercised. Likewise, it doesn’t matter whether or not the control is indirect or direct.
In addition to both entities in a joint-employer relationship being liable for NLRA violations, both entities would be required to bargain. But each entity would need to bargain only over the terms and conditions it possesses the authority to control.
Effective date of NLRB rule
The NLRB issued the rule in the Federal Register on October 27, 2023. It’s scheduled to take effect 60 days from that date – that’s December 26, 2023.
However, it’s classified as a major rule subject to congressional review, so it’s not a done deal yet.
We’ll keep you posted.