NLRB announces final rule governing joint-employer status under the NLRA
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Tuesday, March 3, 2020

NLRB announces final rule governing joint-employer status under the NLRA

By Payroll and Entitlements Editorial Staff

The NLRB announced February 25 that it will issue its final rule governing joint-employer status under the NLRA on February 26, 2020. According to the Board, the final rule restores the joint-employer standard that was applied for several decades prior to the 2015 decision in Browning-Ferris.

Restoring the standard. The final rule:

  • Specifies that to be a joint employer, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees;
  • Defines key terms, including what are considered "essential terms and conditions of employment," and what does, and what does not, constitute "direct and immediate control" as to each of these essential employment terms;
  • Defines what constitutes "substantial" direct and immediate control and makes clear that control exercised on a sporadic, isolated, or de minimis basis is not "substantial";
  • Specifies that evidence of indirect and/or contractually reserved control over essential employment terms may be a consideration for finding joint-employer status under the final rule, but it cannot give rise to such status without substantial direct and immediate control;
  • Makes clear that the routine elements of an arm’s-length contract cannot turn a contractor into a joint employer.

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