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The National Labor Relations Board has finalized the long-awaited joint-employer rule, the agency disclosed Thursday. The rule, which is effective Dec. 26, affects long-term care providers that use temporary or contract workers as well as operators that are part of franchises and others.

“If two entities are joint employers under the National Labor Relations Act (NLRA), both must bargain with the union that represents the jointly employed workers, both are potentially liable for unfair labor practices committed by the other, and both are subject to union picketing or other economic pressure if there is a labor dispute,” wrote Leah Shepherd, senior legal editor for the Society for Human Resource Management.  

The proposed rule had been published in the Federal Register on Sept. 6, 2022, and the comment period for initial comments was open until Dec. 7, 2022. THe NLRB received more 13,000 comments, which it reviewed and considered in drafting the final rule. The effective date of the new rule is Dec. 26, and the new standard will only be applied to cases filed after that effective date.

“The board’s new joint-employer standard reflects both a legally correct return to common-law principles and a practical approach to ensuring that the entities effectively exercising control over workers’ critical terms of employment respect their bargaining obligations under the NLRA,” Chair Lauren McFerran said in a press release

She added that the agency will review each claim on a case-by-case basis to determine whether two or more employers meet the threshold for joint-employer status.

The final rule rescinds a 2020 final rule issued by the previous NLRB. The 2020 rule tended to favor employers, whereas 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,” according to the NLRB.

“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 that a putative joint employer must ‘possess and exercise . . . substantial direct and immediate control’ over essential terms and conditions of employment, which has no foundation in common law,” the agency continued. “The new rule also provides extensive guidance to parties regarding their rights and responsibilities in situations where joint-employer status has been established.”

Read about senior living industry opposition to the rule in McKnight’s Senior Living.

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