The NLRB Postpones the Effective Date of Its Expanded Joint Employer Rule

As we discussed in our October 26, 2023 E-lert, the National Labor Relations Board recently issued a final rule that will result in more findings that two entities are joint employers. Originally scheduled to take effect on December 26, 2023, the Board has now announced that the effective date will be extended to February 26, 2024.

As we previously reported, under the new rule, two companies will be joint employers of workers if they “possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both) one or more of the employees’ essential terms and conditions of employment.” And a joint employer must bargain collectively with employees’ representative with respect to any term or condition of employment that it possess the authority to control or exercises the power to control – even for non-essential terms or conditions of employment.

The new standard will be applied only prospectively, meaning that the old standard will continue to apply to cases filed before February 26, 2024. As we warned previously, however, any arrangements that rely on the old standard may fall afoul of the new standard – and be subject to an unfair labor practice charge – once it takes effect.