NLRB clarifies joint employer standard

It's no secret federal policies, particularly regarding employment issues, have vacillated wildly between the Obama and Trump administrations. Although oscillation of policies between different administrations is typical, the swing from the Bush administration to the Obama administration and then again to the Trump administration has been particularly marked. One subject of this oscillation has been the National Labor Relations Board's (NLRB) joint employer standard. On April 27, 2020, a new rule issued by the Board takes effect, which should clarify when two employers can both be found to employ certain employees for purposes of collective bargaining and unfair labor practice charges. It should settle the uncertainty that has surrounded the NLRB's joint employer rule over the past five years.

Joint employer standard

The joint employer standard is a test the NLRB uses to determine when workers are employed by an entity besides the one that issues their paychecks. The situation commonly occurs when a general contractor employs a subcontractor or when a temp agency supplies workers for its client. In those cases, for example, the general contractor may sometimes be found to be a joint employer of the subcontractor's employees, or the temp agency's client can be found to be a joint employer of the temp agency's employees.

Joint employment is important because a company may find itself subject to collective bargaining obligations with a union representing employees of another company or be held liable for unfair labor practices committed by another company.