National Labor Relations Board Issues Final Joint Employer Rule: Addressing Indirect Control and Union Relations

On October 26, the National Labor Relations Board (NLRB) published its long-awaited final joint employer rule after initially publishing the revised rule for public comment in September 2022. This article delves into the key details of the new rule, its implications for employers, and the expected impact on the business landscape.

Explanation of the New Rule

The new rule replaces the regulations issued by the NLRB in 2020. Unlike the previous regulations, the revised rule considers evidence not only of direct control exercised by employers but also indirect control that is reserved by an employer. This shift expands the scope of what qualifies as a joint employer relationship, potentially affecting businesses in various industries.

Implications for Employers

Under this employee- and union-friendly rule, a company now risks being classified as the employer of workers over whom it does not exercise direct control but could theoretically and contractually. Consequently, if these employees unionize, the company may be obligated to engage in collective bargaining. Additionally, a joint employer could face liability for unfair labor practices committed by another business entity.

Historical Shifts in the NLRB’s View

Over the years, the NLRB’s interpretation of joint employer relationships has evolved, with the focus centering around the type and level of control exerted by an employer over another company’s workforce. The new rule draws inspiration from the Board’s Obama-era “Browning Ferris” rule, reversing prior changes and returning to a broader definition of joint employment.

Key Features of the Rule

The revised rule includes an exhaustive list of seven categories of workplace terms and conditions of employment that trigger the joint employer rule. These categories make the employer a party that exercises or has the potential to exercise control over areas such as wages, benefits, hours of work, hiring, and more. The rule places significant emphasis on indirect control and the mere right to control, rather than actual exercise of control.

Expected Impact on Employers

Given that indirect control and the contractual right to control significant working conditions are sufficient for the NLRB to establish a joint employer relationship, the new rule is expected to have wide-ranging implications for employers. Businesses that engage in staffing agreements or other arrangements where one party has rights to assert over the employees of the other party should immediately seek legal review of their agreements to ensure compliance with the revised rule.

Addressing Union Organizing and Employee Relations

In recent times, union organizing has reached historic highs, and NLRB developments have made it easier for unions to be certified without the necessity of winning an election. In light of these shifts, it becomes crucial for employers to work closely with experienced labor counsel to enact proactive employee relations measures. By ensuring employees are satisfied with their working conditions and environment, businesses can minimize the likelihood of their workforce seeking union representation.

The National Labor Relations Board’s final joint employer rule introduces significant changes to the framework governing joint employment relationships. By expanding the definition of joint employers to include those with indirect control and contractual potential, the rule places heightened obligations on businesses and raises potential liability concerns. Companies should prioritize reviewing their agreements and implementing proactive employee relations strategies to navigate these developments successfully and safeguard their operations. With a comprehensive understanding of the new joint employer rule, employers can adapt their practices to maintain compliance and foster positive labor relations in evolving times.

Explore more

Why Are Big Data Engineers Vital to the Digital Economy?

In a world where every click, swipe, and sensor reading generates a data point, businesses are drowning in an ocean of information—yet only a fraction can harness its power, and the stakes are incredibly high. Consider this staggering reality: companies can lose up to 20% of their annual revenue due to inefficient data practices, a financial hit that serves as

How Will AI and 5G Transform Africa’s Mobile Startups?

Imagine a continent where mobile technology isn’t just a convenience but the very backbone of economic growth, connecting millions to opportunities previously out of reach, and setting the stage for a transformative era. Africa, with its vibrant and rapidly expanding mobile economy, stands at the threshold of a technological revolution driven by the powerful synergy of artificial intelligence (AI) and

Saudi Arabia Cuts Foreign Worker Salary Premiums Under Vision 2030

What happens when a nation known for its generous pay packages for foreign talent suddenly tightens the purse strings? In Saudi Arabia, a seismic shift is underway as salary premiums for expatriate workers, once a hallmark of the kingdom’s appeal, are being slashed. This dramatic change, set to unfold in 2025, signals a new era of fiscal caution and strategic

DevSecOps Evolution: From Shift Left to Shift Smart

Introduction to DevSecOps Transformation In today’s fast-paced digital landscape, where software releases happen in hours rather than months, the integration of security into the software development lifecycle (SDLC) has become a cornerstone of organizational success, especially as cyber threats escalate and the demand for speed remains relentless. DevSecOps, the practice of embedding security practices throughout the development process, stands as

AI Agent Testing: Revolutionizing DevOps Reliability

In an era where software deployment cycles are shrinking to mere hours, the integration of AI agents into DevOps pipelines has emerged as a game-changer, promising unparalleled efficiency but also introducing complex challenges that must be addressed. Picture a critical production system crashing at midnight due to an AI agent’s unchecked token consumption, costing thousands in API overuse before anyone