The National Labor Relations Board (NLRB) has extended the effective date of its recent rule on determining the standard for joint-employer status to February 26, 2024, according to a recent news release.
The move comes in response to considerable recent court filings with the intent to negate the rule, which had been scheduled to take effect on December 26, 2023. In particular, the delay is a result of an industry challenge led by the U.S. Chamber of Commerce being heard in a Texas federal court. There are also motions to remove the matter to one of two federal appeals courts, and the rule’s future is uncertain.
The NLRB’s new rule, which was issued on October 26, 2023, expands the legal test for determining whether two organizations jointly employ the same workers. The new standard changed from direct, exercised control on workers’ job terms to indirect and reserved, unexercised control. This Employers Council article provides more information.
The new rule could have a major impact on certain employers. It makes the definition of joint employer easier to meet, and employers, particularly franchisors and those who use contract labor, will have greater liability for labor law violations and bargaining obligations.
It is important to note that the NLRB will not enforce the rule on cases filed before the rule becomes effective on February 26, 2024, and it won’t be enforced retroactively. Employers Council will monitor court decisions and update members. If you are a Consulting or Enterprise member and have questions or concerns about the new definition, please contact Employers Council to discuss your situation with our Labor Relations attorneys.
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