On October 26, 2023, a considerable development took place regarding labor relations in United States as the National Labor Relations Board (NLRB) issued its long-awaited final rule (the “New Rule”) on the standard for determining joint-employer status under the National Labor Relations Act (NLRA). The New Rule will become into effect December 26, 2023.
This New Rule replaces the previous regulation, “Joint Employer Status Under the NLRA”, which was established under the NLRB during the tenure of former President Donald Trump. This new issuance from the NLRB signifies a crucial point of departure from the previous administration’s stance.
A crucial implication of the New Rule relates to the concept of joint employer status. In essence, this refers to the situation when more than one legal entity, such as franchisor and franchisee or a contractor and subcontractor, are deemed to share control over a worker’s terms and conditions of employment. The responsibility and legal liability for ensuring compliance with labor and employment laws consequently fall on these joint employers.
This rule change could bring about significant impacts for major corporations and law firms and how they navigate labor relations. Future regulatory compliance and litigation strategies would likely be tailored in accordance to the provided framework of this New Rule. It is a development that employers, HR professionals and legal advisors should monitor closely as it could potentially affect their ongoing and future operations.