On February 25, 2020, the National Labor Relations Board (“NLRB”) announced that it would release a final rule that addresses the joint-employer relationship on February 26, 2020. According to the NLRB, “[t]he final rule restores the joint-employer standard that the Board applied for several decades prior to the 2015 decision in Browning-Ferris, but with the greater precision, clarity, and detail that rulemaking allows.”
To be a joint-employer under the final rule, a business must possess and exercise substantial direct and immediate control over one or more “essential terms and conditions of employment” of another employer’s employees, which include wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.
The final rule explains that evidence of indirect and contractually reserved control over essential terms and conditions, that is never actually exercised, as well as control over mandatory subjects of bargaining other than essential terms and conditions, is probative of joint-employer status, but only to the extent that it supplements and reinforces evidence of direct and immediate control.
The final rule is scheduled to go into effect on April 27, 2020.