2023 Expanded Joint Employer Rule: What Employers Need to Know

Compliance
Written By Alex Santos

NLRB joint employer rule: Binder showing the National Labor Relations Act

On October 26, 2023, the National Labor Relations Board (NLRB) issued a final rule that expanded the definition of joint employer under the National Labor Relations Act (NLRA). This means that two or more employers may now be considered joint employers of the same employees, even if they do not have direct control over the employees' terms and conditions of employment.

What is joint employer status?

Joint employer status is a legal concept that can arise when two or more employers share or codetermine the essential terms and conditions of employment of the same employees. If two employers are considered joint employers, they are both liable for the unfair labor practices of the other, and they both must bargain with any union that represents the jointly employed workers.

What does the new rule say?

The new NLRB rule states that two entities are considered joint employers if they share or co-determine the employees' essential terms and conditions of employment. This includes things like wages, benefits, work hours, hiring, and discipline.

The rule also makes it clear that indirect control over terms and conditions of employment is enough to establish joint employer status. This means that even if a company does not have direct control over an employee's wages or benefits, it could still be considered a joint employer if it has indirect control, such as through a franchise agreement or a staffing contract.

What does this mean for employers?

The new NLRB rule has a number of implications for employers. First, it means that more employers may now be considered joint employers. This is because the rule broadens the definition of joint employer to include indirect control over terms and conditions of employment.

Second, the new rule means that employers may be liable for the unfair labor practices of other employers with whom they have business relationships. For example, a franchisor could be liable for the unfair labor practices of its franchisees, even if the franchisor does not have direct control over the franchisees' employees.

Third, the new rule means that employers may be required to bargain with unions that represent jointly employed workers. This is because joint employers are both liable for the unfair labor practices of the other, and they both must bargain with any union that represents the jointly employed workers.

What can employers do to prepare for the new rule?

Employers should take the following steps to prepare for the new NLRB rule:

  • Review their business relationships with other employers to identify any potential joint employer relationships.

  • Conduct a review of their employment practices to ensure that they are in compliance with the NLRA.

  • Develop a plan for responding to union organizing efforts.

  • Train their managers and supervisors on the NLRA and the new joint employer rule.

Conclusion

The new NLRB joint employer rule is a significant development for employers. Employers should carefully review the rule and take steps to prepare for its implementation.

Additional tips for employers

  • Employers should carefully review their contracts with other employers, such as franchise agreements and staffing contracts, to ensure that they do not create joint employer relationships.

  • Employers should develop clear policies and procedures for hiring, firing, discipline, and other employment matters. These policies and procedures should be communicated to all employees.

  • Employers should train their managers and supervisors on how to identify and respond to union organizing efforts.

  • Employers should consult with an attorney if they have any questions about the new NLRB joint employer rule or their joint employer status.

Alex Santos
As Managing Member of Collabor8 Learning, my role is to build and execute learning and development strategies for organizations seeking to improve the return they are getting from their training programs. We focus on four core areas: performance analysis, instructional design, e-learning development, and learning management. As a hybrid HR/instructional design consultancy, Collabor8 Learning partners with your team to leverage today's training technologies to increase the productivity of your people. I am a senior human resources and training executive with over 17 years of progressive experience. My work in private industry has focused heavily on the development of learning and development systems that transform employee performance from ordinary, to remarkable. I accomplish this by combining organizational development strategies and tactics to blended learning programs with line of sight alignment to clearly defined performance goals. Additionally, I launched Miami Payroll Center in conjunction with my brother and sister-in-law in 2004 to meet the payroll needs of small to mid-size organizations. Our consultative approach to guiding new entrepreneurs as well as more seasoned business owners in alleviating the pain of payroll processing has created a very successful and growing payroll processor in the market. Specialties: Instructional Systems Design, E-Learning, Learning Management Systems, Payroll, Organizational Development, Employee engagement, HR Strategic Planning, Talent Acquisition & Management, Leadership Development, Coaching & Mentoring, Employment Branding Proposition & Positioning, Workforce Planning, Performance Management, and Leadership Development.
https://www.bynimble.com
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