NLRB Final Rule on Joint-Employment Status

Is your organization keeping up with national employment regulations? In case you missed it recently, the National Labor Relations Board (NLRB) has issued its final rule governing joint-employer status under the National Labor Relations Act. The final rule, which was issued on February 26, 2020, restores the joint-employer standard that the Board applied for several decades prior to the 2015 decision in Browning-Ferris, but with the greater precision, clarity, and detail that rulemaking allows. The final rule provides clear guidance in this significant area of the law.1 The rule will take effect April 27, according to NLRB.

NLRB’s updated rule effectively overturns the joint-employer standard established by the Obama-era NLRB’s 2015 decision in Browning-Ferris Industries. With a Republican majority, NLRB originally sought to overturn Browning-Ferris via a 2017 decision in a separate dispute, but the board later vacated its decision due to conflict of interest concerns involving one of the majority board members.

This National Labor Relations Board decision tightens up the definition of “joint employer.” Under the 2015 decision of Browning-Ferris Industries, the NLRB had permitted a company to be deemed a joint employer even if its control over the essential working conditions of another business’s employees was indirect, limited, or contractually reserved but never exercised. The new final rule states an entity is a joint employer of a separate employer’s workers only if the two employers share or co-determine the employees’ essential terms or conditions of employment.2

Sandi Silva, ClearPath VP Operations says,

“ClearPath will continue to monitor this new ruling for possible unfavorable effects on the workforce. The final rule is an important development for companies that use contingent workers because now employers will have certainty in structuring their business relationships, and employees will have a better understanding of their employment.”

Let ClearPath assist your organization with contingent worker employment. When ClearPath is your Employer of Record (EOR), we employ your W-2 contingent workers and take over Human Resources and Payroll functions. We manage all paperwork, including employment agreements, worker eligibility, and statutory enrollment documents.

Contact us to learn more about how our expert personalized service can let you get back to focusing on your business goals. Work with a leader in the industry for outsourced Human Resources and Payroll functions associated with W-2 contingent workers. Get the benefits of hiring contingent workers without the potential risks. Let ClearPath be the path to your peace of mind.

Sources:

1 https://www.nlrb.gov/about-nlrb/what-we-do/national-labor-relations-board-rulemaking/standard-determining-joint-employer

2 https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/NLRB-defines-joint-employer.aspx?utm_source=marketo&utm_medium=email&utm_campaign=editorial~HR%20Daily~NL_2020_2-25_Breaking_News-JointEmployer&linktext=NLRB-Issues-New-Definition-of-Joint-Employer&mkt_tok=eyJpIjoiTWpsbFl6Y3dObVF3WTJSaCIsInQiOiJIeWZUZGZlaHdsdTFjcHExVHRWeWwwR2xcL243ampveXh5MzRGSkxyTUNTZm82QTNua1NNcVFMNDB2NjJUN3pLeDFOMVB6d2JOd2NVTkczN1QzQk5qRGVOeVVrQjlNd25XdTZBWVFLSG5uTkF0MVJ3U2J1MFlNc1p6c2JDUGpCNksifQ%3D%3D

Leave a Reply