On October 26, 2023, in a significant evolution of labor law, the National Labor Relations Board (“NLRB”) issued a final rule that broadens the parameters regarding when an entity may be considered a joint employer of a group of employees. This rule, initially proposed on September 7, 2022, presents a revised standard for determining joint employment status.
According to the new standard, an entity may be identified as a joint employer if it maintains an employment relationship with the employees and if such entity, along with others, “share or codetermine” one or more of the employees’ essential terms and conditions of employment. This substantial shift in policy leads to potentially broadened liabilities for corporations and an altered landscape for collective bargaining negotiations.
Critics argue this revised rule could increase vulnerability for businesses with franchise models, subcontractors, or any businesses involved in outsourcing, highlighting their increased potential for legal issues and regulatory scrutiny. As a consequence, these organizations may need to reassess their labor relations strategies comprehensively.
Given that this new standard holds far-reaching implications both legally and operationally for corporations, those in the legal profession, especially those specializing in labor law, need to familiarize themselves with these new guidelines and be prepared for its implementation.
Ongoing and detailed analysis of this topic can be found at
Dinsmore & Shohl LLP.