On October 26, 2023, the National Labor Relations Board issued a
final rule to replace and essentially reverse the joint employer
test issued under the Trump Administration. The new test
drastically lowers the standard for companies to qualify as joint
employers, making them responsible for labor violations and
saddling them with obligations with respect to union negotiations.
The final rule, which rescinds and replaces the prior regulation,
is set to take effect on December 26, 2023, on a prospective basis
only.
The 2020 rule required that a company have “substantial
direct and immediate control” over the “essential terms
or conditions” of a worker's employment in order to be
held liable as a joint employer. In a major “about
face”, the new rule provides that even reserved, unexercised,
or indirect control, such as through an intermediary, over one or
more terms or conditions of employment is sufficient to establish
joint employment. The Board published an
