HR Compliance

NLRB Proposes New Joint Employer Rule

By

Matthew Paque

| Sep 14, 2018

Today, the National Labor Relations Board (NLRB) published a notice of proposed rulemaking (NPRM) intended to clarify what constitutes a joint-employer relationship between two businesses.

The proposed rule

The rule essentially would replace the current Browning-Ferris standard in determining joint-employer relationships. This directly affects businesses that rely on third-party, contracted labor and those with a franchise business model.

The proposed rule states that an employer may be considered a joint employer of a separate employer’s employees only if:

  • the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, discipline, firing, supervision, and direction
  • the employer possesses and exercises substantial direct and immediate control over those essential terms and conditions of employment and
  • has done so in a way that isn’t limited or routine.

According to an NLRB press release, “The proposed rule reflects the Board majority’s initial view, subject to potential revision in response to public comments, that the National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.”

Learn more about what this change could mean for your business in this blog post.

What’s next

The proposed rule won’t go into effect until the 60-day public comment period has ended and a majority of the NLRB’s five members approve the rule. Until then, employers should continue to follow the Browning-Ferris standard.

If you would like to submit a comment for consideration for the new rule, you can do that here until Nov. 13, 2018.

To stay up-to-date on developments of the joint employer rule or other important compliance issues, subscribe to the Paycom blog or follow us on social media.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

About the Author

Matthew Paque

Matthew A. Paque is Paycom’s Executive Vice President of Legal and Compliance. In this role, he is responsible for Paycom’s legal affairs including compliance and risk management. He has served in a variety of leadership and legal positions in both the private sector and in government. Before joining Paycom, Paque was an attorney at the law firm of McAfee & Taft and previously was Assistant General Counsel at Tronox a global mining and chemical company. He holds a J.D. from the University of Oklahoma and a B.A. from Oklahoma City University. Paque is also an adjunct professor at Oklahoma City University’s Meinders School of Business.

See more posts by Matthew Paque