Today, the National Labor Relations Board (the “Board”) issued a Final Rule titled “Standard for Determining Joint Employer Status,” which establishes a new standard for determining whether two employers are joint employers under the National Labor Relations Act (the “Act”).

The new rule states that two employers may be joint employers of the same employees if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” This means that the purported joint employer “possess[es] the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employees’ essential terms and conditions of employment.

“Essential terms and conditions of employment” are defined 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 the performance of duties and the grounds for discipline;
  6. the tenure of employment, including hiring and discharge; and
  7. working conditions related to the safety and health of employees.

Having the authority to control one or more of such terms is sufficient to establish joint employer status, even if such authority is not actually exercised.

Pursuant to the Act, being a joint employer of employees who are unionized means that such joint employer must bargain collectively with the employees’ representative, but only with respect to any term or condition of employment that it possesses the authority to control.

The specific common-law agency principles that are used in the new joint employer analysis are complex, and companies should contact their counsel if they have concerns as to whether or not they may be a joint employer of represented (union) employees.

For more information, see the attached fact sheet here: joint-employer-fact-sheet-2023.pdf