The National Labor Relations Board (NLRB) last week created its own record shot, formally readopting its 2020 joint employer rule and sunsetting the never-implemented Biden administration rule from 2023.
The NLRB skipped the normal rulemaking process, which typically requires a proper review and comment period, jumping directly to the final rule. It was able to avoid these steps because the final rule isn’t actually changing anything. The 2020 rule applied before the Biden administration tried to change the rule in 2023, but a federal court rejected the 2023 rule, which the Biden administration then withdrew. The result of that withdrawal was that the 2020 rule was still in effect. Last week’s action by the NLRB formalizes that outcome by officially readopting the 2020 joint employer rule.
What’s the rule?
Under the 2020/2026 rule, for joint employment to exist under the National Labor Relations Act (NLRA), the putative joint employer “must possess and exercise … substantial direct and immediate control over one or more essential terms or conditions” of the workers’ employment.
“Essential terms and conditions” means wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction.
Substantial direct and immediate control requires that the putative joint employer directly makes the decisions. Merely exerting influence is not enough.
For example, with respect to wages, direct and immediate control means setting the wages. Entering a cost-plus...
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