Home Health & Hospice Week

Don’t let the sliding effective date fool you.

Look out for an important effective date next month regarding the threshold for joint employers.

Background: A redefinition of joint-employer rela­tionships was supposed to take effect last month, based on an October rule on the matter. But multiple legal actions and Congressional pressure prompted the National Labor Relations Board to ease off the gas and extend implementation of the rule until Feb. 26.

What Is A Joint Employer?

The Department of Labor states a joint employment exists when two (or more) businesses simultaneously employ an employee. Under the National Labor Relations Act (NLRA), an employer may be considered a joint employer of a different entity’s employee if the two employers share or codetermine the employee’s essential terms and conditions of employment.

Be aware: The NLRB final rule is completely separate from the DOL rule as the two agencies set joint-employer standards independently of each other and consistent with their different governing statutes.

Previous 2020 NLRA rulemaking set a high threshold for what it meant to “possess and exercise authority or power” over an employee’s essential terms and conditions of employment. This broad view changed with the 2023 final rule, which lowers that bar by revising the wording to state that two or more entities may be considered joint employers when:

1. each entity has an employment relationship with an employee or group of employees;

2. the entities share or codetermine one or more of the employees’ essential terms and conditions of employment, whether such control is exercised (reserved control); and

3. without regard to whether any such exercise of control is direct or indirect.

Reserved control and indirect control will become way more relevant to the determination of joint-employer status than ever before.

The change greatly expands who may be considered a joint employer, warns the National Association for Home Care & Hospice.

“The Final Rule creates a risk that even relatively routine commercial terms, if touching indirectly or remotely on employment terms and conditions, can be interpreted to create the potential of direct or even indirect control over employment terms and conditions,” warn attorneys Laura A. Pierson-Scheinberg and Lorien E. Schoenstedt with law firm Jackson Lewis in online analysis of the rule.

Know this: The new rule will apply only to cases filed after the rule is effective.

What Is Reserved vs Indirect Control?

“Reserved control” defines situations where an alleged joint employer maintains authority to control essential terms and conditions of employment but has not yet exercised such control.

The thought is that an entity holding such control may step in at any moment to affect the employees’ essential terms and conditions. Even when the entity does nothing, it supposes it may cloud the other employer’s decision-making with respect to such terms.

“Indirect control” refers to control exercised through an intermediary or controlled third party. This language prevents an entity from avoiding joint-employer status by using an intermediary to implement decisions about essential terms and conditions of employment.

The rule defines essential terms and conditions of employment as:

• wages, benefits, and other compensation;
• hours of work and scheduling;
• the assignment of duties to be performed;
• the supervision of the performance of duties;
• work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
• the tenure of employment, including hiring and discharge; and,
• working conditions related to the safety and health of employees.

The joint-employer standard is only implicated if an entity employs the worker and has authority to control at least one of these terms or conditions. Authority over other matters is not sufficient.

Be aware: The NLRA defines the rights of employees in both union and non-union workplaces. So, the new joint-employer rule as written impacts both these workplaces.

And the NLRB further clarifies that “a joint employer’s bargaining obligations are not limited to those ‘essential terms and conditions’ of employment that it controls, but extend to any ordinary mandatory subject of bargaining that is also subject to its control.”

Bottom line: Being deemed a joint employer means you can have joint responsibility for things like collective bargaining, the other entity’s worksite health and safety rules, employment practices, etc. That could put you at risk of potential unfair labor claims, union organizing, potential strike picket lines at your site, and so on.

The NLRB believes that postponing the effective date of the rule will facilitate resolution of the legal challenges, although not everyone agrees. Some experts believe the rule will be the subject of legal and legislative debate for some time, and result in even further delays. Regardless, businesses should prepare now for changes to the standard, they advise.

Note: The NLRB rule is at www.govinfo.gov/content/pkg/ FR-2023-11-22/pdf/2023-25803.pdf.