Last Updated: September 08, 2022
The U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB) both have rules which govern when specific workers should be considered jointly employed by different employers. Early in 2020 both agencies updated those rules to require that employers must have some form of direct control over a worker to be considered an employer of that worker. In September 2021 the DOL rescinded its rule after part of it had be invalidated by a federal court in 2020. In September 2022 the NLRB issued a Notice of Proposed Rulemaking seeking to dramatically expand the application of the Joint Employer rule.
The NLRB’s proposal would invalidate the rule issued in 2020, which stated that for one company to be deemed an employer of another company’s worker, the first company was exerting direct control over essential terms and conditions of the second company’s employees. Under the new proposal, the mere existence of the right to exert control over just one item essential to the terms and conditions of employment would make the first company a joint employer of the second company’s worker. That would make the employer jointly liable for labor violations and for potential collective bargaining. As such, the employer would be considered a joint employer even if no right of control is ever actually exercised.
NACS supports the direct control standard adopted by the DOL and the NLRB in 2020 and opposes the proposed changes from the NLRB.