NLRB Reinstates 2020 Joint-Employer Standard

The National Labor Relations Board (NLRB) has reinstated a 2020 final rule regarding joint employment that rescinds the 2023 final rule. The 2023 rule, now rescinded, sought to create a more inclusive standard that would have made it easier for employers to be classified as joint employers by removing the requirement that joint employers must possess and exercise substantial direct and immediate control over essential terms and conditions of employment. Specifically, the rule considered the alleged joint employers’ authority to control essential terms and conditions of employment, regardless of whether they exercised that authority. 

The 2020 (and now current) standard considers the substantial direct and immediate control employers have over one or more essential terms and conditions of employment - wages, benefits, scheduling, etc. - for individuals who are employed by another organization. The employer must possess and actually exercise substantial direct and immediate control of employment to be considered a joint employer.

Under the joint-employer doctrine, an employee employed by one employer (the primary employer) may be deemed employed by another employer (the secondary employer) if the secondary employer exercises sufficient control over the employee’s terms and conditions of employment. When an employer is deemed a joint employer of another entity’s employees, it is subject to the same legal obligations as the primary employer.