NLRB Retools Joint Employer Rule: CEI Statement

Today, the National Labor Relations Board put out a proposed rule establishing a new “joint employer” standard on when two employers would be liable for employment-related decisions. CEI labor policy analyst Trey Kovacs is encouraged by the new rule, made possible by the addition of new, Trump-era appointees to the NLRB.

“The NLRB’s proposed rule seeks to restore longstanding principles on what establishes a joint employer relationship, which rightly center around direct and substantive control over work conditions of another business. The proposed new standard will create greater certainty for businesses, which will allow employers to plan for the future and be confident in knowing what kinds of business-to-business relationship will establish a joint employer relationship.”  

The joint employer issue has been a contentious one ever since the Obama-controlled NLRB in 2015 abruptly changed the standard, increasing both uncertainty and liability for franchise businesses and contractors. Numerous small business owners testified before Congress that this confusing standard stifled business expansion plans and created other difficulties.

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