A new definition of the joint employment standard: What you need to know
The National Labor Relations Board (NLRB) voted last August to change its definition of the joint employment standard, a decision that could impact firms who use contractors and other outside labor.
The NLRB, in a 3-2 decision, ruled that a recycling firm and a contractor providing workers for the recycling operation were joint employers of the workers. In its ruling, the NLRB's majority wrote that "(the) right to control, in the common-law sense, is probative of joint-employer status, as is the actual exercise of control, whether direct or indirect.”
Of the NLRB ruling, Steptoe & Johnson attorneys Scott Sinder and Kate Jensen wrote: "The practical effect of the Board’s new joint employer standard is that more employers can now be held liable for unfair labor practices under the National Labor Relations Act (“NLRA”). Whereas under the old approach only the supplier firm may have been held liable for labor violations, now the user firm is more likely to be deemed a joint employer and be on the hook as well."
The NLRB’s joint employment standard ruling comes during a boom in the “gig economy,” where many are taking part-time work or stringing together a series of side jobs for a full-time income. According to a 2016 TIME magazine estimate, about 45 million Americans have “offered some kind of good or service” in this economy.
The joint employment standard decision also appears as companies cope with the Affordable Care Act, with health benefits required for many full-time employees. Viewed through this lens, it’s easy to see why companies might look to hire independent contractors to fill roles that might have gone to full-time employees a generation ago.
For questions on how the NLRB ruling could affect your business, contact a member of your Plexus client service team or reach out to us at 847-307-6100 (Chicago) or 972-770-5010 (Dallas / Oklahoma). You can also contact us via the Web at plexusgroupe.com. We’re here to help.