The National Labor Relations Board (“Board”) has once again revised its definition of a “joint employer” due to a new final rule published in the Federal Register, indicating significant implications for legal professionals and their corporate clients. This revised definition could greatly widen the scope of who may be designated as a “joint employer” under the National Labor Relations Act (“Act”).
As detailed here, the updated definition was published on October 27, 2023. Now, under the final rule, two or more companies will be considered “joint employers” of particular employees, provided those companies “share or co-determine those matters governing employees’ essential terms and conditions of employment”. These could include essential factors such as wages, benefits, amongst other facets of employment conditions.
The enlargement of the “joint employer” definition has the potential to reconfigure the landscape of employer liabilities and responsibilities. Companies that were historically considered separate in employment matters might now have joint obligations. Likewise, employees working under these “joint employers” might expect a change in how their employment conditions are determined.
This adjustment by the Board creates a call to action for legal professionals working for corporations or engaged in advising companies. It is crucial that those in the legal profession seek to understand the expanded interpretation and its potential implications for their clients’ businesses. Possessing this understanding may be vital in ensuring clients remain compliant with labor laws and protected in matters of employer liabilities.
The continual evolution of definitions within the labor and employment legal landscape emphasizes the necessity for legal professionals to stay informed and adaptable. To effectively navigate these changes, they must maintain an updated understanding of such regulations, fortifying their ability to advise and ensure the success of their clients in complying with these revised laws.