Newly Proposed Standard May Increase Your Liability
What is a Joint Employer?
Joint employers are two or more individuals or entities that share control of an employee or group of employees. Under the 2020 National Labor Relations Board (NLRB) rule, an entity can only be considered a joint employer of an employee if it "possesses substantial direct and immediate control over one or more of the essential terms of the employee's employment as would warrant finding that the entity meaningfully effects matters relating to the employment relationship with those employees."
The NLRB published a notice of proposed rulemaking on September 7th. Under the proposed rule that broadens the standard, two or more employers would be considered joint employers if they "share or codetermine those matters governing employees' essential terms and conditions of employment."
The proposed rule is not yet final, however it is likely to impact labor and business relationships. If enacted, the rule will expand the number of businesses considered joint employers for purposes of the National Labor Relations Act (NLRA).
Why this Matters to You
Under the newly proposed rule, employers that frequently use another employer's employees would more likely be found to be joint employers, potentially increasing the risk of liability under federal law. Under the NLRA, joint employers:
- must bargain with the union that represents the jointly employed workers
- both are potentially liable for unfair labor practices committed by the other
- both are subject to union picketing or other economic pressure if there is a labor dispute
Examples of employer groups that may be affected are:
- entities supplying or using temporary employees
- entities using contract labor to perform support functions like facilities maintenance and security
- contractors/subcontractors
- franchisors/franchisees
A final ruling will be issued in the coming months. We recommend contacting your attorney to evaluate current contractual arrangements and discuss how the rules affect your business.
Koppinger & Associates helps clarify complex regulations that affect your bottom line.
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