NLRB Finalizes Joint Employer Rule

On February 26, the National Labor Relations Board (NLRB) issued its final rule governing joint-employer status under the National Labor Relations Act. The rule, proposed in late 2018 and now scheduled to take effect April 27, 2020, returns to the standard the Board applied prior to the 2015 Browning-Ferris decision. The final rule specifies that a business is a joint employer if it:

  • Shares or codetermines another employer’s employees essential terms and conditions of employment
    • The list of essential terms and conditions consists of: wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction
  • Exercises such substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees such that it meaningfully affects matters relating to the employment relationship

The final rule also:

  • Specifies that examples of indirect and contractually reserved but never exercised control over essential terms and conditions, as well as mandatory subjects of bargaining, can lend support to a finding of joint-employer status, but only if evidence of direct and immediate control exists

Joint employer status has been a battleground for the last several years; see our previous posts on Browning Ferris (2015) and Hy-Brand (2017). Earlier this year, the U.S. Department of Labor (USDOL) issued its final rule on determining joint-employer status under the Fair Labor Standards Art (FLSA) and the U.S. Equal Employment Opportunity (EEOC) is expected to soon release guidance on joint employment under federal anti-discrimination laws.

For more information, see the NLRB press release or the Fact Sheet.