Board issues final rule on joint employer status under NLRA
The National Labor Relations Board recently issued a final rule on how to determine whether an employer jointly employs another employer’s workers under the National Labor Relations Act (NLRA). Historically, companies, workers, unions, and attorneys had to rely on old Board decisions to analyze whether organizations were joint employers under the NLRA, but the Board issued this final rule in an attempt to more clearly define joint-employer status under the NLRA. This rule comes shortly after the federal Department of Labor (DOL) issued its new rule on joint employer status, as we previously reported. The DOL’s rule applies to the Fair Labor Standards Act (which addresses minimum wage, hours worked, and overtime), while the Board’s rule applies to the NLRA (which allows most nonmanagement workers, regardless of union representation, to band together on issues related to wages, hours, and working conditions).
Under the NLRA, if an employer jointly employs another employer’s workers, the (joint) employer is subject to collective bargaining with unions representing those workers, legally protected picketing if the workers go on strike, and liability for unfair labor practices under the NLRA, just the same as the direct employer. Under the new rule, a business is a joint employer if it possesses and exercises “substantial direct and immediate control over one or more essential terms and conditions” of a worker’s employment with the direct employer, including “wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.” Businesses that sometimes end up being considered joint employers are temp agency clients (which could be joint employers with the temp agencies), franchisors (which could be joint employers with their franchisees), and contractors (which could be joint employers with their subcontractors).
Tips for Employers: Read the Board’s helpful Fact Sheet on the new rule. Just because a business is a client of a staffing agency or is a franchisor or contractor doesn’t automatically mean it’s a joint employer. The rule requires the business to control one or more essential terms and conditions of employment, and even then, the business may still not be a joint employer, depending on the facts. Your Vigilant Law Group employment attorney can help you analyze your situation. Questions? Call us.
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This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.