New proposed ‘joint employer’ definition coming out in July, says NLRB

Michael Carrouth
Labor attorney at Fisher Phillips

Changing the definition of joint employer status under the National Labor Relations Act is high on the National Labor Relations Board’s to-do list, according to a list of spring rulemaking priorities released Tuesday. The proposed rule, of interest to long-term care providers that use temporary or contract workers as well as operators that are part of franchises and others, is expected next month, according to the agency.

The Fair Labor Standards Act requires employers to pay their employees at least the federal minimum wage for every hour worked as well as for overtime work for qualified workers over 40 hours in a work week. The current rule holds that a business is a joint employer of workers directly employed by another employer – and there are liable for meeting obligations of the NLRA for those workers – only if the two employers share or co-determine the workers’ essential terms and conditions. employment.

The NLRB plans to expand the test to establish joint employer status, which means that “long-term care operators will face increased exposure and liability to the extent they use employees and staff provided by a third party,” Michael Carrouth, a labor relations officer. partner at Fisher Phillips, told the McKnight’s Business DailyGeneral Chat Chat Lounge “Basically, using host employers provided employees or compensated through a third party, such as a staffing company, will need to examine their contracts and procedures associated with such arrangements if they face a significant risk of being a joint employer.”

The test in the current regulation, established during the Trump administration, requires establishing that a business actually exercises direct, immediate and regular control over the essential terms and conditions of employment (wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction) for that business to be considered a joint employer.

The Biden administration’s expected change would be “finding that a joint employment relationship exists when a business has only the contractual right to control another business of employees, whether or not such control is exercised or not,” Carrouth said.

“The Bottom line, the expanded joint-employer test will give labor organizations more options to consider in their efforts to increase organizing and add more members,” he added.

The change in broader application of joint employer status will result in “whenever a business has control over any term or condition of employment and establishing control over essential terms and conditions will be unnecessary,” Carrouth opined.

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