National Labor Relations Board Nixes Biden-Era Joint Employer Rule

The National Labor Relations Board (NLRB) released a finalized regulation on Feb. 26 that withdrew the NLRB’s Biden-era joint employer rule and replaced it with a standard that the bureau adopted in 2020 during the first Trump administration. (Since the 2023 regulation never took effect, the new regulations does not change anything for businesses.)

The Metals Service Center Institute opposed the Biden administration regulation, and so did federal courts. As HR Dive reported, a federal judge previously vacated the Biden rule, arguing it was both “contrary to law” and “arbitrary and capricious.” The 2023 rule said entities qualified as joint employers if they shared or codetermined essential terms and conditions of employment. Under the rule, that sharing occurred when the entities possessed or exercised either direct or indirect control over one or more such terms.

The regulation that the NLRB issued on Feb. 26 retains the 2020 rule’s language, defining “substantial” direct and immediate control to mean that which has a regular or continuous effect on an essential employment term or condition, rather than on a “sporadic, isolated or de minimis basis.” Read more at this link.

As SHRM explained, A joint-employer relationship refers to when different entities exercise the requisite control over an employee that they have each formed an employment relationship with that individual. When the relationship is formed, that creates certain rights and obligations between the parties under different acts, including the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the National Labor Relations Act.