NLRB proposes rule on standard for determining joint-employer status

Provided by: TechServe Alliance

The National Labor Relations Board (NLRB) recently issued a notice of proposed rule-making on the standard for determining joint-employer status under the National Labor Relations Act (NLRA), replacing the final rule that took effect on April 27, 2020. Employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment,” including scheduling, wages and benefits.

According to the proposed rule, the changes are designed to explicitly ground the joint-employer standard in established common-law agency principles. They would also provide relevant guidance to parties covered by the NLRA regarding their rights and responsibilities when more than one statutory employer possesses the authority to control or exercises the power to control particular employees’ essential terms and conditions of employment.

Joint employers share liability for unfair labor practices and responsibility for bargaining with the union. Expanding the joint-employer standard could have major consequences in the franchising industry and for organizations sourcing workers through contracts, temporary staffing agencies and other business-to-business arrangements. The proposed rule reflects the NLRA’s aims to promote collective bargaining and stabilize labor relations by easing organizing and collective bargaining for staffing, franchise and other workers with ties to multiple employers.

“In an economy where employment relationships are increasingly complex, the Board must ensure that its legal rules for deciding which employers should engage in collective bargaining serve the goals of the National Labor Relations Act.”

-NLRB Chair Lauren McFerran

What’s Next?

On September 7, 2022, the NLRB formally published the proposed rule in the Federal Register. Public comments regarding the proposed rule must be received by the board on or before November 7, 2022. Subsequently, the NLRB will review comments and determine whether to move forward with a final rule.

Employers should stay tuned for updates from TechServe Alliance but otherwise operate as normal. We will keep you apprised of any notable changes.