The National Labor Relations Board (NLRB) issued a new rule on October 26 clarifying the standard the Board will use to determine joint-employer status, and replacing the faulty rule issued by the Trump Board in 2020.
Under the new standard, an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or codetermine one or more of the employees’ essential terms and conditions of employment, which are defined exclusively as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.
This long overdue rule will help to curb the ability of employers to hide behind temporary staffing agencies, contractors, and franchisees and skirt their bargaining obligations and liability for unfair labor practices. The rule provides that a joint employer “must bargain collectively with the representative of those employees with respect to any term and condition of employment that it possesses the authority to control or exercises the power to control.” Closing this loophole will make sure that workers with multiple employers are able to negotiate for fair pay and safe working conditions with every company that has the power to control their workplaces.
As AFL-CIO President Liz Shuler said, “The rule is about basic common sense. The right to collectively bargain is nonexistent if the company that has the power to change workers’ terms and conditions of employment isn’t negotiating with workers.”
The new rule will go into effect on December 26. As always, clients are encouraged to contact the firm with any questions regarding changes in the law.