NLRB Amends Effective Date of Final Rule on Standard for Determining Joint Employer Status
Published November 21, 2023
The National Labor Relations Board (NLRB) issued a delay of effective date to the final rule rescinding and replacing its rule, published on October 27, 2023, regarding the standard for determining joint employer status under the National Labor Relations Act. The effective date in the rule is amended from December 26, 2023, to February 26, 2024. The purpose of the amendment is to facilitate the resolution of the legal challenges with respect to the rule.
(Updated November 21, 2023)
The National Labor Relations Board (NLRB) issued a final rule to rescind and replace the final rule entitled “Joint Employer Status Under the National Labor Relations Act,” which was published on February 26, 2020 and took effect on April 27, 2020.
This final rule expands the factors that can trigger a joint-employer finding beyond just one business exerting direct and immediate control over the most important parts of a worker’s job. A new test also accounts for indirect and unexercised control. For example, if a company exerts control over another firm’s workers through an intermediary, or has contractual authority over employment terms but never used that power, that would still serve as evidence of a joint employer relationship. More specifically:
- This final rule establishes a new standard for determining whether two employers, as defined in the National Labor Relations Act (NLRA), are joint employers of particular employees within the meaning of the NLRA.
- The NLRB believes that this rule will more explicitly ground the joint-employer standard in established common-law agency principles and provide guidance to parties covered by the Act regarding their rights and responsibilities when more than one statutory employer possesses the authority to control or exercises the power to control particular employees’ essential terms and conditions of employment.
- Under the final rule, an entity may be considered a joint employer of another employer’s employees if the two determine the employees’ essential terms and conditions of employment.
The effective date is December 26, 2023. However, this rule has been classified as a major rule subject to Congressional review. At the conclusion of the congressional review, if the effective date has been changed, the NLRB will publish a document in the Federal Register to establish the new effective date or withdraw the rule.