On the NLRB’s Updated Joint Employer Rule

Washington, DC – Following is a statement from Rebecca Dixon, president and CEO of the National Employment Law Project, on the National Labor Relations Board’s final rule updating the legal standard for determining when a worker has more than one employer with obligations under the NLRA.

“NELP supports the National Labor Relations Board’s final joint employer rule, published yesterday, which restores the broad, common-law test for determining who is an employer responsible for recognizing the right of its workers to organize. The rule will ensure that millions of workers in underpaid subcontracted jobs are protected by federal labor law.

“The new rule codifies the important principle that, under the NLRA, an employer is someone who has the right to control the essential terms and conditions of a worker’s employment. The control may be direct or indirect, and it may be simply reserved and not exercised.

“In publishing this new final rule, the Board rescinds its misguided 2020 rule, which improperly narrowed the NLRA’s coverage and unmoored the legal standard from the common law.

“Millions of workers in labor-intensive and underpaid jobs in industries like retail, hospitality, fast food, janitorial, construction, and delivery are hired by intermediary subcontractors—such as staffing agencies, specialized contract firms, and franchisees—to provide work central to the hotels, retail operators, fast food chains, construction contractors, delivery companies, and other corporations that rely on their labor. But corporations that outsource work to intermediary subcontractors do not automatically outsource their obligations under federal labor law.

“Under this rule, as long as these companies have the right to control the essential terms and conditions of their workers’ employment, they are employers responsible for complying with the NLRA. Whether that control is direct or indirect, exercised or held in reserve, they must respect the rights of their workers to organize and must participate in bargaining and negotiate in good faith.

“The new rule will ensure that subcontracted workers can hold responsible all employers who retaliate against them for exercising their right to organize or who refuse to negotiate in good faith about the terms and conditions of their work.

“With this rule, the Board has taken a major step toward safeguarding the labor rights of millions of workers in subcontracted employment, ensuring that corporations cannot skirt the law simply by outsourcing responsibility for their workers.”

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