LABOR RELATIONS UPDATE: The NLRB's new Joint Employer rule took effect on December 26, 2023 (pending congressional approval), adjusting the definition of a "joint employer" for the purposes of claims-related worker rights guaranteed in the National Labor Relations Act.* Those rights include the right to collective bargaining and other concerted efforts to improve working terms and conditions:
wages, benefits, and other compensation;
hours of work and scheduling;
the assignment of duties to be performed;
the supervision of the performance of duties;
work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
the tenure of employment, including hiring and discharge; and
working conditions related to the safety and health of employees.
What is the new rule? The NLRB will now consider a company to be a joint employer if each entity has an employment relationship with the employees and they “share or codetermine one or more of the employees’ essential terms and conditions of employment, which are defined exclusively as [the seven items bulleted above].”
What has changed? The previous rule said the company (usually the larger company – franchisor, outsourcer, etc.) needed to possess and exercise substantial oversight or influence in these matters. The new rule says they only need to have this power, not that they exercise it directly. So going forward, it’s going to be more difficult for some of the largest companies in the country to avoid unionization or collective bargaining because the joint employer relationship will be more broadly defined.
The NLRB’s official announcement is here, accompanied by a Fact Sheet.
For a deeper dive: Check out Amy Cooley's September HR Coach column for more on the NLRA and how it affects your Employee Handbook.
*Note that this is a National Labor Relations Board rule, and does not affect the Department of Labor’s definition of “joint employer” which is used in enforcement of the Fair Labor Standards Act (which addresses items like minimum wage and overtime rules).