09/20/2018

NLRB to Change Joint-employer Standard

The board's revising its test for determining whether two employers are considered joint employers

The National Labor Relations Board (NLRB) announced this week it is revising its test for determining whether two employers are considered joint employers and are both liable under the National Labor Relations Act (NLRA).

To be considered a joint employer under the new NLRB rule, an employer must possess and actually exercise substantial direct and immediate control over the essential terms and conditions of employment such as hiring, firing, discipline, supervision and direction. Three years ago, the NLRB adopted a more expansive definition of joint employer that did not require direct control of an employee to be considered a joint employer.

The news was welcomed by franchise owners, contractors and other types of small businesses.

“The NLRB’s announcement is good news for franchises and franchise employees across the country,” said International Franchise Association President and CEO Robert Cresanti.  “Franchise owners have been frustrated about the vague and uncertain legal minefield created by the NLRB joint employer standard since it was expanded in 2015. Rulemaking is an important step to address the concerns of local business owners by providing the clear lines in the determination of joint-employer status. We look forward to participating in the public notice and comment process in the coming days.”

This article was provided to OSAE by the Power of A and ASAE's Inroads.