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The Joint Employer Rule- What Employers Need to Know

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On November 14, 2023 Carrier released an article titled “Joint Employer Rule Could Ease Unionization”, indicating that “[a] new federal rule that goes into effect next month could make it easier for millions of workers to form unions at big companies like McDonald’s.”

As for “[t]he rule — [which was] announced late last month by the National Labor Relations Board — [it] sets new standards for determining when two companies should be considered “joint employers” under the National Labor Relations Act.” In effect, “the rule could widen the number of companies that must participate in labor negotiations alongside their franchisees or independent contractors.”

“The 88-year-old National Labor Relations Act guarantees the right of U.S. workers to form or join unions.” As to the NLRB, “[t]he NLRB says the new rule changes a 2020 rule that made it too easy for joint employers to avoid their responsibility to negotiate with workers.”

There has been some pushback. “U.S. Sens. Joe Manchin, a West Virginia Democrat, and Bill Cassidy, a Louisiana Republican, have introduced a Congressional Review Act resolution that would overturn the rule” which “…resolution must pass both houses of Congress and be signed by President Joe Biden.” “The new rule is scheduled to go into effect Dec. 26.”

Origins of the Rule

“The new joint employer rule had its origins in the Obama administration” and “[i]n 2015, the NLRB ruled that Browning-Ferris Industries, a waste management company, should be considered the joint employer of contract workers who were sorting its recycling because it had authority over their working conditions.” “A federal court upheld the NLRB’s decision in 2018.”

Later, “…during the Trump administration, the Republican-controlled labor board narrowed the definition of a joint employer”, where, “[u]nder the 2020 rule, companies could be considered a joint employer only if they had “substantial direct and immediate control” over employment conditions.”

As for “[t]he latest rule — passed by a board now controlled by Democrats — [it] more closely resembles the Browning-Ferris ruling from 2015” and “[i]t says companies may be considered joint employers if they have the authority to control, directly or indirectly, at least one condition of employment”, which “[c]onditions include wages and benefits, hours and scheduling, the assignment of duties, work rules and hiring.”

Of note, “[t]he rule only applies to labor relations” as “[t]he Department of Labor sets its own joint employment standards for issues like meeting minimum wage requirements.”

If you have any further questions or concerns as to how this rule may affect your company’s workplace policies and procedures, we, at Thomas Paschos & Associates, P.C. would be glad to speak with you and review your workplace policies and procedures. One of our attorney specializing in this field can speak with you today about our services. Contact Thomas Paschos & Associates, P.C. for more information. We can be reached at 856-354-1900 or 267-205-2444. You can also contact Thomas Paschos, Esq.


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