September 18th by Asero Insurance Staff 0 0The National Labor Relations Board has issued a proposed rule that would roll back an Obama-era board decision on joint-employer status for companies that hire subcontractors or use staffing or temp agency workers. The decision by the NLRB in 2015 overturned a long-time precedent (a standard in place since 1984) that a company must have “immediate and direct” control over a worker to be considered a joint employer. The board ruled instead that a company need have only “indirect” control of a worker and not even exercise that control to be considered a joint employer. Under the 2015 standard, a company could be deemed a joint employer even if its “control” over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised. The ruling was roundly criticized by businesses as it put both the hiring employer and its contractor or staffing agency on the hook for labor violations. The decision also applied to franchisors that were suddenly liable for labor issues at individual franchisees’ operations. The ruling also spread plenty of confusion in the employer community, and it sent companies that used contract or temp labor to set strict written procedures of where their responsibility ended and the subcontractor’s began. The proposed rule The proposed rule affects businesses:
- That are franchisees or franchisors,
- Use temporary staffing agencies to supply manpower, or
- Hire outside or subcontractors to work on their sites.