Ryan Swanson & Cleveland, PLLC
401 Union Street, Suite 1500
Seattle, WA 98101-2668
206.464.4224
Ryan Swanson & Cleveland, PLLC
401 Union Street, Suite 1500
Seattle, WA 98101-2668
206.464.4224

Ryan Swanson & Cleveland, PLLC
401 Union Street, Suite 1500
Seattle, WA 98101-2668
206.464.4224

News & Articles

National Labor Relations Board (NLRB) Issues Final Joint-Employer Rule Significantly Expanding Joint-Employer Status

Published October 31, 2023

On October 26, 2023, the National Labor Relations Board (NLRB) issued the final rule: Standard for Determining Joint-Employer Status under the National Labor Relations Act. This rule is scheduled to go into effect on December 26, 2023, and it rescinds the NLRB’s 2020 rule on joint employers. The new rule creates a new standard for determining whether an entity qualifies as a joint employer of another entity’s employees.

The new standard is that an entity may be considered a joint employer if each entity has the power or authority, either directly or indirectly, to control one or more of the employees’ essential terms of employment. The rule defines the essential terms of employment as:

(1) Wages, benefits, and other compensation;
(2) Hours of work and scheduling;
(3) The assignment of duties to be performed;
(4) The supervision of the performance of duties;
(5) Work rules and directions governing the manner, means, and methods of performing duties, as well as grounds for discipline;
(6) The tenure of employment, including hiring and discharge;
(7) Working conditions related to the safety and health of employees.

It is worth noting that companies need not actually exercise control over these aspects, but merely having the authority to do so could make them subject to joint employer status.

The new rule creates a very broad definition for joint employers, and it is likely that many more entities will be considered joint employers under the new standard. This development carries significant implications, as joint employers may be held accountable for potential liability related to unfair labor practices committed by their co-joint employer. Moreover, they may be required to engage in collective bargaining with such employees regarding the terms and conditions of employment over which the joint employers have the authority to control.

In light of this, companies should review current and prospective contracts and relationships to determine whether they may meet the criteria of a joint employer under the new rule. Legal challenges to this new rule are expected, so employers should stay informed about upcoming legal challenges and how they might impact the rule’s implementation.

View the NLRB news release here and the final rule here for more information.

If you have any questions, please contact any member of Ryan Swanson’s Employment Rights, Benefits & Labor group.






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