The National Labor Relations Board’s “joint employer” rule now is set to go into effect on March 11 after a federal judge granted a stay last week.
The rule was to go into effect today after the original effective date of Dec. 26 was extended by the NLRB in November.
The judge issuing the stay last week, US District Judge J. Campbell Barker of the Eastern District of Texas, an appointee of former President Donald Trump, said that “an opinion with the court’s reasoning will be issued forthwith.”
The NLRB issued the final rule in October after proposing a rule in September 2022 and receiving more than 13,000 comments. The new rule rescinds and replaces one, promulgated in 2020 under the previous board, that some viewed as being more favorable to employers.
Long-term care providers that use temporary or contract workers, as well as operators that are part of franchises, and others, could be affected.
“Under the new standard, an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or co-determine one or more of the employees’ essential terms and conditions of employment,” the NLRB said in October. Those terms and conditions, according to the board, include:
- 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.
“In particular, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect,” the NLRB said in a fact sheet. “By contrast, the 2020 rule made it easier for actual joint employers to avoid a finding of joint-employer status because it set a higher threshold of ‘substantial direct and immediate control’ over essential terms of conditions of employment, which has no foundation in common law.”
Senior living and care industry representatives previously told McKnight’s Senior Living that the new rule was “much broader and more vague” than the previous rule and will present greater risk for employers that contract with services providers, “creating greater liability for the actions of others.”
The rule faces a lawsuit, filed in November by the US Chamber of Commerce and a coalition of business groups, that calls the new rule overly broad and said that it will “cripple small businesses in numerous sectors.” Barker held a hearing related to that lawsuit on Feb. 13.
Additionally, 62 business associations, including the American Seniors Housing Association, sent a letter to Congress in November urging legislators to support a Congressional Review Act resolution to nullify the rule. The bipartisan resolution was introduced by Sens. Bill Cassidy (R-LA) and Joe Manchin (D-WV).
Also in November, the top Republican member of the Senate Special Committee on Aging and three other Republicans on the committee told NLRB Chairman Lauren McFerran that the rule will have a “particularly negative impact on senior living arrangements.”
Sen. Mike Braun of Indiana, the ranking member, along with Sens. Pete Ricketts of Nebraska, Marco Rubio of Florida and Tim Scott of South Carolina, wrote in a Nov. 17 letter to McFerran that they had “significant concerns” about the rule’s potential effects on older Americans.
“Long-term care organizations frequently depend on stable contracts with a broad set of partners for effective operations. These contracts cover vital residential supports, from nutrition services and maintenance to staffing arrangements,” the senators wrote, citing an Oct. 27 McKnight’s Senior Living article that detailed senior living industry opposition to the rule.
The new rule, according to the four Republican senators, will “disrupt long-term care organizations’ stable relationships and longstanding practices that have provided many older adults with high levels of support and satisfaction.” Senior living operators, they said, will face increased liability for contracts with other service providers as well as “onerous” collective bargaining standards.
“We urge the Board to reconsider the impact of its rule, reengage with aging services stakeholders, and return to the 2020 rule’s fairness and flexibility,” they wrote.
Twenty-two Democratic senators, including Senate Aging Committee Chair Bob Casey of Pennsylvania and three other current members of the committee (Sens. Richard Blumenthal of Connecticut, Kirsten Gillibrand of New York and Elizabeth Warren of Massachusetts), previously expressed support for the rule after it was proposed in September 2022 and as the NLRB considered comments before finalizing it in October 2023.
The rule, they said in a Dec. 7, 2022, letter to the NLRB, is “both good policy and furthers congressional intent motivating the passage of the National Labor Relations Act (NLRA) itself.”
