The determination of joint employment status by the NLRB has been a contentious issue for the past seven years. On September 6, 2022, the National Labor Relations Board (NLRB or Board) released a Notice of Proposed Rulemaking (NPRM) addressing the standard for determining joint-employer status under the National Labor Relations Act (NLRA). The NPRM proposes to rescind the Trump Administration’s 2020 rule for determining whether two entities are joint employers under the NLRA which took effect on April 27, 2020. The proposed rule, if adopted by the Board, will result in it being easier to find that two entities are joint employers. Under federal labor law, a joint employer is required to bargain with a union selected by its jointly employed workers and may be held liable for the unfair labor practices committed by the other employer.
The proposed rule states that two or more employers will be considered joint employers if they share or codetermine the essential terms and conditions of employment, including but not limited to:
- Wages, benefits, and other compensation;
- Hours of work and scheduling;
- Hiring and discharge; discipline;
- Workplace health and safety;
- Assignment of work; and
- Work rules and directions governing the manner, means or methods of work performance.
The Board will use a broad approach for making such determinations by proposing to consider evidence of both direct and indirect control over essential terms and conditions of employment, whether reserved or active, when analyzing joint employer status.
Next Steps for Employers
If approved, employers may be facing new liability under this proposed rule, as an employer can be deemed a joint employer if it has indirect and unexercised control over the employment terms and conditions of an employee who is shared with another employer under the proposed rule.
Interested parties will have until November 7 to comment on the proposed rule, which may be submitted on the applicable Federal Register webpage, and the Board must consider such comments prior to issuing a final rule.
Employers should also note that there are different rules and tests for joint employment under various laws, such as Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act (FLSA) and the Federal Family and Medical Leave Act (FMLA). The NLRB proposed rule would not supersede the other rules; it would be one among many standards. As such, when attempting to determine whether your business may be a joint employer, it is recommended that legal counsel also be consulted.
HR Works will continue to monitor this topic and provide updates as they become available.