Employers have relied on decisions by the National Labor Relations Board (NLRB) that define “joint employer” in structuring their businesses, including decisions to hire temporary or contingent workers, to establish subsidiary companies, and even to make franchise arrangements.
In a recent decision, however, the NLRB has turned this world upside down by redefining and broadening the definition of “joint employment” for purposes of the National Labor Relations Act (NLRA). In reaching its decision, the NLRB stated that the use of contingent and temporary workers is increasing and the “joint employer” standard needs to be changed to adapt to the “changing patterns of industrial life.” The NLRB observed that employers were structuring their businesses to avoid organizing efforts by workers.
The NLRB rejected the existing standard for joint employment that required a finding that the company exercise direct and immediate control over the employees’ essential terms and conditions of employment. Under the new standard, a company may be a joint employer when it has reserved the authority to control or codetermine the terms and conditions of employment, even when it has chosen not to exercise that authority.
Therefore, if a business using contingent workers owns and controls the facility, dictates the essential nature of the job, and imposes the broad, operational contours of the work, it can be found to be a joint employer. In effect, the NLRB stated that the workers day-to-day working conditions are subject to two layers of control and a company is a joint employer and subject to collective bargaining with regards to the terms and conditions of employment over which it has control.
This decision has implications for all employers with regard to union activity and collective bargaining. It may also have broader implications if other agencies such as the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) decide to revisit joint employment as well. Companies with business arrangements that might meet the new standard for joint employer relationships should review each situation and consider how vulnerable they may be to union organizing activity.
Recent/Upcoming Compliance Dates
August 27, 2015: The National Labor Relations Board has held that unionized employers will be in violation of the National Labor Relations Act if they unilaterally stop deducting union dues from employee paychecks after the expiration of a collective bargaining agreement. They must continue to withdraw union dues until they bargain with the union over the issue.
September 30, 2015: The EEOC has opened its reporting portal for its annual EEO-1 surveys. The survey must be filed with EEOC every year by employers with 100 or more employees and by federal contractors, with 50 or more employees and $50,000 or more in government contracts. The deadline for filing is September 30, 2015, and the employment data must be pulled from one pay period in July, August, or September of the current survey year.
September 3, 2015: In New York City it is unlawful for employers to request or use an applicant’s consumer credit history for employment purposes or to otherwise discriminate against an applicant with regard to hiring, compensation, or the terms and conditions of employment based on the applicant’s consumer credit history.
In a recent decision, however, the NLRB has turned this world upside down by redefining and broadening the definition of “joint employment” for purposes of the National Labor Relations Act (NLRA). In reaching its decision, the NLRB stated that the use of contingent and temporary workers is increasing and the “joint employer” standard needs to be changed to adapt to the “changing patterns of industrial life.” The NLRB observed that employers were structuring their businesses to avoid organizing efforts by workers.
The NLRB rejected the existing standard for joint employment that required a finding that the company exercise direct and immediate control over the employees’ essential terms and conditions of employment. Under the new standard, a company may be a joint employer when it has reserved the authority to control or codetermine the terms and conditions of employment, even when it has chosen not to exercise that authority.
Therefore, if a business using contingent workers owns and controls the facility, dictates the essential nature of the job, and imposes the broad, operational contours of the work, it can be found to be a joint employer. In effect, the NLRB stated that the workers day-to-day working conditions are subject to two layers of control and a company is a joint employer and subject to collective bargaining with regards to the terms and conditions of employment over which it has control.
This decision has implications for all employers with regard to union activity and collective bargaining. It may also have broader implications if other agencies such as the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) decide to revisit joint employment as well. Companies with business arrangements that might meet the new standard for joint employer relationships should review each situation and consider how vulnerable they may be to union organizing activity.
Recent/Upcoming Compliance Dates
August 27, 2015: The National Labor Relations Board has held that unionized employers will be in violation of the National Labor Relations Act if they unilaterally stop deducting union dues from employee paychecks after the expiration of a collective bargaining agreement. They must continue to withdraw union dues until they bargain with the union over the issue.
September 30, 2015: The EEOC has opened its reporting portal for its annual EEO-1 surveys. The survey must be filed with EEOC every year by employers with 100 or more employees and by federal contractors, with 50 or more employees and $50,000 or more in government contracts. The deadline for filing is September 30, 2015, and the employment data must be pulled from one pay period in July, August, or September of the current survey year.
September 3, 2015: In New York City it is unlawful for employers to request or use an applicant’s consumer credit history for employment purposes or to otherwise discriminate against an applicant with regard to hiring, compensation, or the terms and conditions of employment based on the applicant’s consumer credit history.