NLRB Proposes to Broaden Joint Employment Standard

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From JDSupra, Rebecca Leaf discusses the proposed joint employer rule issued by the National Labor Relations Board (“NLRB”). Rebecca writes:

On September 6, 2022, the National Labor Relations Board (“NLRB” or “Board”) issued a much anticipated proposed rule that would broaden the circumstances under which two companies may be held responsible for labor law violations and union bargaining obligations under federal labor law. The rule has the potential to create labor law obligations and liability for companies that contract with staffing agencies to supply their labor, as well as franchisors.

Two companies are joint employers if they “share or codetermine” employees’ essential terms and conditions of employment (i.e., wages, benefits, and other compensation; hours of work and scheduling; hiring and discharge; discipline; workplace health and safety; supervision; assignment; and work rules and directions governing the manner, means, or methods of work performance). Under the proposed rule, a company may “share or codetermine” terms and conditions of employment by merely reserving the right to control these terms, regardless of whether it exercises that right. Likewise, a company may “share or codetermine” terms and conditions of employment where it exercises even indirect control over such terms, such as through an intermediary or other entity.

The proposed rule is a significant departure from a 2020 rule, issued by a then-Republican controlled Board, which required a putative joint employer to “possess and exercise substantial direct and immediate control over essential terms and conditions of employment.” The Board’s two Republican members, who sat on the Board when it issued the 2020 Rule, dissented in the notice of proposed rulemaking.

The Board will receive public comments on the proposed rule until November 7, 2022. Miles & Stockbridge labor attorneys will continue to monitor developments regarding the Board’s joint employer standard.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

Source: NLRB Proposes to Broaden Joint Employment Standard | Miles & Stockbridge P.C. – JDSupra

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