NLRB proposes sweeping changes to joint-employers standard

The National Labor Relations Board (NLRB) is responsible for overseeing relations between labor and employers for both unionized and nonunionized workplaces and for administering the National Labor Relations Act (NLRA). Yesterday, the Board issued a proposed rule that will massively affect franchise businesses, staffing firms, and companies that use contractors to help operate their businesses.

Who’s the boss?

Currently, to be considered the “employer” under the NLRA, an entity must exercise “direct and immediate” control over workers. The NLRB’s new test would lower that standard and result in more entities being considered a co- or joint employer for individuals.

Under the proposed rule, a business would be considered a co- or joint employer for any workers with whom they “share or codetermine” terms and conditions of employment, such as hiring, task assignment, compensation, or discipline. Under the test, companies that exercise direct or indirect control over workers could be considered joint employers with a staffing company, contractor, or franchisor for purposes of the NLRA. That means a company could be sued for labor law violations and could conceivably be required to recognize and bargain with unionized workers they use through a contracting or staffing business.

Employer comments due to NLRB by November 7