A recent development by the National Labor Relations Board (NLRB) is reshaping the responsibilities and liabilities of businesses. The new joint employer rule, effective December 26, 2023, introduces significant changes to the criteria for determining joint employer status under the National Labor Relations Act (NLRA).
While there isn’t one sole definition of joint employment, there are in fact multiple ways that it is determined. Overall, it relates to situations in which more than one business or entity shares control or supervision over an employee’s activities, making all involved liable for any circumstances surrounding unfair labor practices, legal compliance and other potential responsibilities.
Notably, the new rule emphasizes that even indirect control or authority over employment terms can establish joint employer status, diverging from the previous focus on direct and immediate control.
For example, if an employer outsources an IT company to regularly assist with technology issues and provides directions on how the IT company’s employees support the business, they could be considered a joint employer despite not directly employing the IT workers.
Being recognized as a joint employer carries significant implications for businesses. These implications extend beyond NLRA protections, with courts potentially imposing liability for wage/hour violations, discrimination, or harassment claims.
In light of the NLRB’s new joint employer rule, businesses should review their relationships with vendors, independent contractors, and other third parties, and adapt accordingly to this new standard.
Understanding how you classify can be difficult. If you have questions on how to assess your professional partnerships and navigate potential joint employer status, I’m happy to help. Please contact me at edgar@officiumdc.com or schedule a time to talk here.