On October 27, 2023, the National Labor Relations Board, (NLRB), published a final rule addressing the standard for determining joint-employer status.
The final rule establishes that, under the National Labor Relations Act (NLRA), two or more entities may be considered joint employers of a group of employees if each entity has an employment relationship with the employees, and if the entities share or co-determine one or more of the employees’ essential terms and conditions of employment.
How does the 2023 standard differ from the 2020 standard?
The final rule rescinds and replaces the 2020 final rule that was promulgated by the prior Board, and which took effect on April 27, 2020.
The 2023 rule lowers the joint-employer standard in establishing whether an entity may be considered jointly liable under the NLRA. In particular, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect. The new rule clearly recognizes that reserved control and indirect control are relevant to the analysis.
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