Earlier today, the National Labor Relations Board (NLRB) issued a Final Rule on the Standard for Determining Joint-Employer Status under the National Labor Relations Act. The rule replaces the final rule issued in 2020, which had itself modified the standard adopted during the Obama Administration. The new rule will take effect on December 26, 2023 (click here to view a fact sheet on the rule).
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:
- Wages, benefits, and other compensation;
- Hours of work and scheduling;
- The assignment of duties to be performed;
- The supervision of the performance of duties;
- Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
- The tenure of employment, including hiring and discharge; and
- Working conditions related to the safety and health of employees.
The rule represents a significant expansion of joint employer status by using either the authority to control conditions of employment or exercising the power to indirectly control conditions of employment as being sufficient to establish joint employer status. This means that either indirect or reserved control may serve as basis for determining a joint employer relationship, and the existence of either, without regard to the extent of the reserved or indirect control, indicates joint employer status.
The rule appears to be closely aligned with the proposed rule issued last September, which Argentum signed onto comments as part of the Coalition for a Democratic Workplace to oppose. Those comments argued that the rule is arbitrary and capricious, diverges from the common law, ignores federal law, Congressional intent, and court precedent and would undermine collective bargaining and destabilize labor relations.
