Joint-Employer
NWRA Position
NWRA supports codifying a “direct” control joint-employer standard in both the National Labor Relations Act (NLRA) and Fair Labor Standards Act (FLSA).
Background
In 2015, the National Labor Relations Board (NLRB) issued a ruling in the Browning Ferris Industries (BFI) case on what constitutes a “joint-employer.” In the decision, the NLRB found that two or more entities are joint-employers of a single workforce if they are both employers within the meaning of the common law and if they share or codetermine those matters governing the essential terms and conditions of employment.
Although the NLRB reversed themselves on this in a December 2017 ruling in a different case, that decision was vacated later due to a commissioner’s failure to recuse himself. NLRB issued a new final rule governing joint-employer status under the NLRA that went into effect in April 2020. This amounts to four shifts in the standard over the course of just five years.
In March 2021, the Department of Labor proposed rescinding the FLSA joint-employer rule that went into effect in March 2020. In addition, the Protecting Right to Organize (PRO) Act (H.R. 842 / S. 420) would codify NLRB’s BFI joint-employer standard and expose nearly every business to liability for unlawful behavior committed by its contractors, suppliers and franchisees.
NWRA supports the Save Local Business Act (S. 1636 / H.R. 3185) introduced in May 2021 that would codify a “direct” control joint-employer standard in both the NLRA and FLSA to make clear that an employer may be considered a joint-employer in relation to an employee only if such employer directly, actually and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment.
Key Takeaways
- An expansive interpretation of joint-employer status puts users of contractors at risk of a joint-employer finding simply if they require their contractors’ workers to follow safety rules generally applicable to anyone on the premises, regardless of their employment status.
- The waste and recycling industry supports creation of a consistent standard to guide businesses in confidently deciding whether to enter into arrangements intended to constitute contractor relationships.
- A clear delineation of employer responsibility as put forward in the Save Local Business Act will help ensure a safe workplace, whereas a blanket assumption of joint-employer status can result in confusing and conflicting directives that make employees less, not more, safe.