The National Labor Relations Board (NLRB) took the unusual step of making a rule to implement the policy on joint-employer status (usually, its policy is set by rulings on individual cases). The goal of the rule is to return to a standard in place before 2015. But as the law firm Jackson Lewis notes, it’s not identical to what was in place before.
The new rule will take effect April 27.
In an article published Monday on its website, Jackson Lewis attorneys Jonathan Spitz, Richard Vitarelli, Harold Bloom and Linda Carlozzi lay out what has changed.
To be found to be a joint employer under the new rule, a business must possess and exercise substantial direct and immediate control over at least one essential term and condition of employment of another employer’s employees—wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.
The designation can be critical. If general contractors, for instance, are deemed to be a joint employers with their subcontractors, then they could be liable for the actions of those subcontractors for things like wage and hour violations.
Under the previous rules, indirect control or contractual requirements were enough to create joint-employer status, a move that some critics have credited to a dramatic increase in workplace complaints motivated by access to the deeper pockets of franchisors. Jackson Lewis attorneys say that indirect control can still be a consideration, but not in every case.
“Thus, the mere reservation of control over essential employment terms cannot per se establish joint-employer status without evidence of substantial direct and immediate control,” the article states.
This is probably not the last word on joint employment. New Jersey is one of 17 states whose attorneys general have sued to go back to the old standard. Jackson Lewis writers also say courts have typically followed a “common law” definition of joint employment, which the new rule does not address.
“It appears the board heeded the court’s guidance in its final rule,” the Jackson Lewis article states.
“The Court’s Browning-Ferris opinion is nuanced,” it continues. “There is no guarantee or assurance the final rule will withstand judicial scrutiny as it certainly will be challenged in the courts. In addition, several lawmakers have voiced opposition to the final rule.”