ARTICLE
30 November 2023

NLRB's New Joint-Employer Rule

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Shaw Law Group

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Jennifer Shaw and her team have built a reputation on helping employers stay out of court. Clients rely on Shaw Law Group for practical advice, engaging training sessions, impartial investigations, and decades of experience and expertise to navigate the most difficult and complex of workplace law situations.
The National Labor Relations Board ("NLRB") continued its busy year by recently finalizing a new joint employer rule under the National Labor Relations Act ("NLRA").
United States Employment and HR
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The National Labor Relations Board ("NLRB") continued its busy year by recently finalizing a new joint employer rule under the National Labor Relations Act ("NLRA"). This rule is used to determine when multiple employers may share liability for unfair labor practices, or be jointly obligated to engage in the collective bargaining process.

So, what does the new rule change? Currently, an entity may be a joint employer if it actually exercises direct, substantial control over another entity's employees. But the new rule establishes joint employment even where an entity has only indirect control over "one or more essential terms and conditions of employment"—even if an entity does not actually exercise that control. ("Essential terms and conditions" include compensation; hours of work and scheduling; assignment and supervision of job duties; work rules and discipline; hiring and firing; and working conditions.)

This change means that joint employment will be easier to establish between employers and their vendors, clients, contractors, and other business partners. For example, if your organization places consultants at client sites who may indirectly control the working conditions of client employees, you could be jointly liable for your client's labor violations. Moreover, you might be obligated to bargain with your client's employees.

This new rule is likely to be especially challenging for employers in industries relying on subcontracting, consulting, and temporary staffing needs, such as construction, healthcare, engineering, IT, and others. But, practically speaking, most employers should review their relationships and agreements with other entities with whom they work, to determine whether a joint employment relationship may exist.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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