On Sept. 7, the National Labor Relations Board (NLRB) published a notice of proposed rulemaking that would change the standard for when two employers who do business together are considered to be joint employers and thus liable for the other’s unfair labor practices. The proposed rule would replace a 2020 NLRB rule that deemed an employer to be a joint employer of another entity’s workers only if it had direct and immediate control, and they actually exercised control, over the essential terms and conditions of employment of the other entity’s workers.

The Biden administration’s proposed rule would create a broader standard where even evidence of potential and indirect control over working conditions could be deemed sufficient to confer joint employer status. Under the proposed rule, two or more employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.”

While still in the early stages of the rulemaking process – public comments being accepted through November 7 – employers subject to the National Labor Relations Act should prepare in the event this broad new standard takes effect, as soon as early next year.

For example, employers that use third party employment staffing agencies should review their contracts with those entities.  An employer may be deemed a joint employer under the proposed if such agreements reserve significant aspects of control over the workforce such as wages, benefits, work conditions. Under the proposed rule, the staffing agency’s client may be deemed a joint employer even if it never actually acts on that authority.

Electronic comments may be submitted through http://www.regulations.gov.