United States: NLRB amends rules for joint-employer status

The NLRB (National Labor Relations Board, an independent agency of the United States government in charge of protecting the right of employees to unionise and investigating illegal practices in the workplace) published on Wednesday 26 February its final rule for joint-employer standards, which will come into force on April 27. To qualify as a joint employer under the final rule, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees. Indirect and/or contractually reserved control over essential employment terms are no longer sufficient for joint-employer status under the final rule, unless they entail substantial direct and immediate control, however evidence thereof may be taken into consideration for finding joint-employer status. This new rule restores the approach adopted by the NLRB prior to the decision regarding Browning-Ferris Industries of California Inc. (see article n°9216), which broadened the scope of the notion of joint employment, in particular by including franchise agreements. A joint employer under the National Labor Relations Act, which the NLRB upholds, may be obliged to negotiate with the union representing the workers of the direct employer, and each company is potentially liable for unfair labour practices committed by the other. In January, the US Department of Labor limited the definition of joint employment in the context of the Fair Labor Standards Act (FLSA), which guarantees the right to a minimum wage (see article n°11585).