So that you can focus on serving families, NFDA is always on the lookout for changes in laws and regulations that impact you and your business. NFDA Endorsed Provider SESCO Management Consultants recently shared that the National Labor Relations Board (NLRB) has issued a new joint employer rule.
The NLRB has long held that when two or more employers share or co-determine essential terms and conditions of employment, they are both considered employers of the employees in question. They are “joint employers” of those employees.
The new rule spells out what the Board considered “essential” terms and conditions of employment. They are:
- Wages, benefits, and other compensation
- Hours of work and scheduling
- The assignment of duties to be performed
- The supervision of the performance of duties
- Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline
- The tenure of employment, including hiring and discharge
- Working conditions related to the safety and health of employees.
The new rule emphasizes that an employer’s right to control one or more essential terms will be considered, even if it is not exercised. This is true whether the right is reserved or exercised directly or indirectly (via a third party).
For example, where a contract states that the customer employer has the right to request that specific persons not be assigned to the customer employer, the Board would view that as a reserved right to control an assignment at the least, if not tenure of employment as a practical matter.
The new rule is set to take effect on December 26, 2023.
This ruling only applies to the National Labor Relations Act and not to determinations of co-employer status under state laws or other federal laws such as the Occupational Safety and Health Act, the Fair Labor Standards Act, or the Internal Revenue Code. While the National Labor Relations Act is primarily known for its regulation of union and organizing activity, the NLRB has been more aggressive recently in enforcing and making employees aware of their rights to engage in protected activity to improve pay and other working conditions or to fix job-related problems.
If your firm provides or utilizes employees of another organization, you will want to review the terms of your agreements. To what extent is control reserved regarding one or more of the identified essential terms of employment? Is such reservation necessary under the circumstances? Are there ways in which the provider employer can be given more independence?
If you are unsure of whether this new regulation applies to you or if it does and you have questions about what you need to do, NFDA’s endorsed human resources consultant SESCO Management Consultants can help. Click here for more information about how to connect with them for a free consultation.