By: Philip A. Toomey, Esq.
On September 14,2018, the National Labor Relations Board (“NLRB”) published a Notice of Proposed Rulemaking in the Federal Register regarding the joint employer standard. Under the Proposed Rule, an employer is considered a joint employer of another employer’s employees only if (1) it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and (2) has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority will no longer be sufficient to establish a joint employer relationship.
The current rule, enacted by the NLRB when it was controlled by a majority of former President Obama’s nominees, states that a business can be a joint employer even if it’s control over the essential working conditions of another businesses’ employees is indirect and limited. The current rule expanded the number of businesses deemed to be “joint employers.” If the Proposed Rule is adopted by the board controlled by President Trump, it will reverse the current rule and will likely mean fewer businesses will be considered to be joint employers.
The Proposed Rule affects joint employer status only for matters arising under the National Labor Relations Act. Some states, including California, impose different rules for different aspects of the employer-employee relationship that either expand or restrict joint employer status on matters such as workplace safety and wage and hour liability. Employers operating in a multi-state environment should carefully review, and comply with, individual state law irrespective of how the NLRB ultimately acts on the Proposed Rule.
Public comments are invited on all aspects of the Proposed Rule and should be submitted before November 13, 2018. Comments can be submitted electronically at www.regulations.gov.
Leech Tishman’s Employment Practice Group can help clients ensure compliance with California’s complex and technical employment laws and can assist clients with defending against civil or administrative actions.
If you have any questions regarding California’s unique employment laws or these employment law updates, please contact Philip Toomey. Phil serves as Leech Tishman’s West Coast Business & Employment Client Relations Partner and practices in the firm’s Employment, Corporate, Litigation and Real Estate Practice Groups. Phil is based in the Leech Tishman’s El Segundo, CA office. He can be reached at 424.738.4400 or firstname.lastname@example.org.
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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, aviation & aerospace, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in El Segundo, CA, Chicago, Los Angeles, New York, Sarasota and Wilmington, DE.