Joint Employer Standard/Unionization

The National Labor Relations Board (NLRB) recently revised the so-called “joint employer” standard significantly to expand the scope of determining “co-employment” under the National Labor Relations Act.  Specifically, the NLRB decided that a company could be considered a “joint employer” if it possesses the right to control various terms and conditions of employment, regardless of whether that company actually exercises such control.

Broadening the standard will expose more companies to legal liability for how their subcontractors, staffing agencies and franchisees treat their employees. The ruling also makes businesses more susceptible to workforce unionization by imposing new collective bargaining obligations and allowing unions the ability to strike or picket a large corporate entity rather than the individual location where there is a dispute.

This is the latest step in recent efforts to expand the definition of “employment” to enhance worker benefits. In 2015, the Department of Labor released “guidance” that has the effect of limiting employers’ ability to classify workers as “independent contractors” rather than employees.

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