NLRB Expands Joint Employer Criteria: Understanding the New Control Standard

The National Labor Relations Board (NLRB) has introduced a significant shift in the standards for joint employer status. This new rule alters how businesses may be jointly responsible for the same group of workers. Previously, the standard was based on the actual exercise of control over employees’ work conditions. However, the updated criteria expand this definition to include the reserved right to control, whether or not that right is actively exercised. This change aims to reflect the complexities of modern workplace relationships where indirect influences can inform employee working conditions. Companies in various sectors may find themselves needing to reassess their business practices and relationships with partnering firms or contractors in light of this broader joint employer definition. This influential update has the potential to reshape business liabilities and worker rights across a multitude of industries, prompting careful review and adaptation from employers to ensure compliance.

The Shift Away from Direct Control

Historically, the NLRB required proof of “substantial direct and immediate control” over workers’ essential job conditions for two companies to be considered joint employers. The 2020 standard took a narrow approach, concentrating on direct and significant contextual actions. Contrastingly, the new rule, effective from February 26, 2024, moves away from this. Now, reserved authority or even indirect control over critical aspects of employment—which includes wages, work hours, assignments, supervision, and other core factors—can trigger joint employer status. This evolution signals a notable change in stance from the NLRB and broadens the potential for union bargaining and liability for labor practices.

The change means that entities such as franchisors or clients of staffing agencies, who may not be directly managing workers, could find themselves with the responsibility to negotiate labor terms. The ruling indicates that the mere reservation of authority over employment conditions, whether used or not, suffices to warrant joint employer designation. Underlying this shift is the NLRB’s aim to ensure workers’ rights to collective bargaining are preserved, even in complex employment arrangements. Thus, a company could be deemed a joint employer and held accountable for labor law violations based on its reserved right to control job conditions, even when there is no exercised control.

Exploring the Implications of Indirect Control

The recent ruling affecting franchising businesses and others using subcontractors or staffing agencies has significant implications. It implies that companies must closely examine their contractual relationships to avoid being classified as ‘joint employers’ due to indirect control over employment conditions. This necessitates careful monitoring of any influence they may exert, even if not direct, to prevent becoming liable for additional responsibilities associated with staff.

Firms are encouraged to review their contracts and operational practices to identify where they might seem to have influence over worker-related aspects. The NLRB’s rule, despite asserting a uniform approach, requires intricate case-by-case analyses, complicating compliance. Thus, organizations need to proactively revise their practices in relation to this broadened rule to sidestep unforeseen legal pitfalls, especially given the changing dynamics of the workplace and the increasingly ambiguous lines of workforce accountability.

Explore more

How Is AI Revolutionizing Payroll in HR Management?

Imagine a scenario where payroll errors cost a multinational corporation millions annually due to manual miscalculations and delayed corrections, shaking employee trust and straining HR resources. This is not a far-fetched situation but a reality many organizations faced before the advent of cutting-edge technology. Payroll, once considered a mundane back-office task, has emerged as a critical pillar of employee satisfaction

AI-Driven B2B Marketing – Review

Setting the Stage for AI in B2B Marketing Imagine a marketing landscape where 80% of repetitive tasks are handled not by teams of professionals, but by intelligent systems that draft content, analyze data, and target buyers with precision, transforming the reality of B2B marketing in 2025. Artificial intelligence (AI) has emerged as a powerful force in this space, offering solutions

5 Ways Behavioral Science Boosts B2B Marketing Success

In today’s cutthroat B2B marketing arena, a staggering statistic reveals a harsh truth: over 70% of marketing emails go unopened, buried under an avalanche of digital clutter. Picture a meticulously crafted campaign—polished visuals, compelling data, and airtight logic—vanishing into the void of ignored inboxes and skipped LinkedIn posts. What if the key to breaking through isn’t just sharper tactics, but

Trend Analysis: Private Cloud Resurgence in APAC

In an era where public cloud solutions have long been heralded as the ultimate destination for enterprise IT, a surprising shift is unfolding across the Asia-Pacific (APAC) region, with private cloud infrastructure staging a remarkable comeback. This resurgence challenges the notion that public cloud is the only path forward, as businesses grapple with stringent data sovereignty laws, complex compliance requirements,

iPhone 17 Series Faces Price Hikes Due to US Tariffs

What happens when the sleek, cutting-edge device in your pocket becomes a casualty of global trade wars? As Apple unveils the iPhone 17 series this year, consumers are bracing for a jolt—not just from groundbreaking technology, but from price tags that sting more than ever. Reports suggest that tariffs imposed by the US on Chinese goods are driving costs upward,