Joint-employer ruling by NLRB effective April 27

The final joint-employer rule will go into effect April 27, 2020, thanks to successful lobbying by the ABC National staff. The National Labor Relations Board issued its final rule on the standard for determining joint-employer status on February 26:

  • Specifies that a business is a joint employer of another employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment;
  • Clarifies the list of essential terms and conditions: wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction;
  • Provides that to be a joint employer, a business must possess and exercise such substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees, as would warrant a finding that the business meaningfully affects matters relating to the employment relationship;
  • Specifies that evidence of indirect and contractually reserved but never-exercised control over essential terms and conditions, and of control over mandatory subjects of bargaining other than essential terms and conditions, is probative of joint-employer status, but only to the extent that it supplements and reinforces evidence of direct and immediate control;
  • Defines the key terms used in the final rule, including what does and does not constitute “substantial direct and immediate control” of each essential employment term;
  • Makes clear that joint-employer status cannot be based solely on indirect influence or a contractual reservation of a right to control that has never been exercised.
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