The National Labor Relations Board (NLRB) released today its Final Rule regarding the Standard for Determining Joint-Employer Status under the National Labor Relations Act (NLRA). The NLRB press release states:
Under the new standard, an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or codetermine one or more of the employees’ essential terms and conditions of employment . . . .
The “essential terms and conditions of employment” are defined exclusively as:
(1) wages, benefits, and other compensation;
(2) hours of work and scheduling;
(3) the assignment of duties to be performed;
(4) the supervision of the performance of duties;
(5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
(6) the tenure of employment, including hiring and discharge; and
(7) working conditions related to the safety and health of employees.”
The Board’s press release continues: “the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.”
The Rule is effective December 26, 2023. The Board also issued a Fact Sheet regarding the Rule. Employers that are joint employers under the NLRA must bargain with the union representing the jointly employed workers and may both be liable for unfair labor practices committed by the other employer. In addition, joint employers under the NLRA are both subject to union picketing. The Rule is available here and can be found at 29 CFR Part 103.40.
Per the Rule, “to ‘share or codetermine those matters governing employees’ essential terms and conditions of employment’ means for an employer to possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employees’ essential terms and conditions of employment.”