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Posted on: December 6, 2022

National PELRA Signs on to NLRB Joint Employer Rule

The National PELRA signed on to the Joint Employer Rule issued by NLRB that is creating a concern it is too broad, confusing, and with little to no guidance. Why is it important that the National PELRA signed on to a private sector NLRB ruling? That answer is your respective state decisions often follow NLRB rulings and trying to mitigate or protect the private employer rights will only help with public employment standards.

Under the current standard, businesses can only be joint employers if they exercise direct and immediate control over the essential terms and conditions of employment for the same group of employees. The NLRB, however, is trying to make indirect or even just reserved, unexercised control sufficient to trigger joint employer status. This would be a radical and devastating expansion of the joint employer standard.

Under this new rule, businesses will be forced to protect themselves against significantly more liability and obligations under the law. The franchise business model, for example, would be gutted, as the larger franchisor will move to end or limit their support to franchisees or exert increased authority over them, essentially turning those small business owners into employees. The new standard would also force larger companies to subsume local small businesses rather than work with individually owned enterprises, stifling entrepreneurship, business innovation, and flexibility. The expanded standard even hampers businesses’ efforts to encourage “corporate responsibility” among their business partners to the detriment of workers, consumers, and their communities.

Primary goals for comments to the NLRB include:

  •  “clarify and limit the types and degrees of indirect and reserved control that would now trigger joint-employment liability;”
  • “resolve any conflicts with existing Federal requirements;”
  • "reassess the rule’s compliance costs; and
  • “consider significant alternatives that would accomplish the objectives of the statute while minimizing the economic impacts to small entities as required by the Regulatory Flexibility Act.”

Additional Resources and/or Reading Materials:

Read US Small Business Administration Comment Letter

Joint Employer Facts Sheet

Coalition for a Democratic Workplace - Joint Employer

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