As previously reported on PERKS, the NLRB is seeking to apply a new standard for determining joint-employer status, designed to result in more entities being deemed joint employers. This will likely result in more entities being involved in NLRB proceedings, potentially forced to the bargaining table with unions, or liable for alleged violations of the NLRA.
Faced with a number of legal challenges to the rule, the NLRB delayed the effective date from December 26, 2023 to February 26, 2024. Those challenges have not been resolved, and now a court has stepped in to delay the effective date even further. Late last week, a U.S. district judge issued a stay delaying the effective date until March 11, 2024. The judge’s order suggests a full opinion is coming soon, which will likely give insight into the court’s assessment of the merits of the legal arguments in opposition to the rule and more clarity on whether employers will be subject to it going forward.
As a reminder, the new rule amends the 2020 rule, by which joint employer status had a high threshold requiring that a putative joint employer “possess and exercise . . . substantial direct and immediate control” over essential terms and conditions of employment. Under the new standard, an entity may be considered a joint employer of a group of employees “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.,” such as wages, hours of work and scheduling, assignment of duties, etc.
For now (at least until March 11), the rule remains in limbo, but employers should familiarize themselves with it to be prepared in the event it survives legal challenge and goes into effect. It’s a good time to review relationships with third party entities to determine whether they could be considered a joint employer under the new rule should it go into effect.