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NLRB Proposes Changes to the Joint Employer Standard

Friday, November 30, 2018
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The National Labor Relations Board (NLRB) has standards for determining when multiple employers are responsible for a single employee. Now, the agency has proposed changes that would establish a stricter standard for determining joint employer status. These changes could have a large impact on NLRB compliance in many industries, as businesses with joint employees can be held liable for labor practices committed by another employer.

Currently, joint employer status is established when a business has “sufficient” control over a worker’s essential terms and conditions of employment, regardless of whether the employer actually exercised its right of control. However, critics argued that sufficient control isn’t a clear definition and that many businesses aren’t aware when they’re in a joint employer scenario. 

Under the current standard, the NLRB can determine that even indirect influence or common contractual reservations of authority establish joint employment. Unfortunately, businesses can then be found liable for another employer’s unfair labor practices. The proposed changes would establish a clearer standard for establishing these situations:

  • Two employers must share or codetermine an employee’s essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.
  • An employer must possess and exercise substantial, direct and immediate control over the essential terms and conditions of employment of another business’s employee in a manner that isn’t limited and routine.
  • Indirect influence and contractual reservations of authority would no longer establish joint employer status.

The NLRB proposed these changes in order to make the standard more predictable and prevent third parties that don’t have an active role in critical terms of employment from entering into a collective-bargaining relationship with another business’s employees.

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Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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