National Labor Relations Board Finalizes Joint Employer Rule

The National Labor Relations Board Thursday published a rule updating the standard for determining when multiple employers, including construction companies, are considered joint employers under the National Labor Relations Act.

The final rule establishes that, under the National Labor Relations Act, two or more companies may be considered joint if each one has an employment relationship with a group of workers and if they share one or more of the employees’ "essential terms and conditions of employment." It also addresses joint employers’ bargaining obligations.

The rule takes effect 60 days after it’s published, which was expected today.

At least one construction trade group vocally opposed the changes. “Unfortunately, the Biden NLRB decided to dramatically expand joint-employer liability under the National Labor Relations Act, which will disrupt existing contractor and subcontractor relationships throughout the construction industry,” Ben Brubeck, vice president of regulatory, labor and state affairs of the Associated Builders and Contractors, said in a statement.

The changes “will cause confusion and impose unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry,” Brubeck wrote in November 2022. “As a result, contractors may be vulnerable to increased liability, making them less likely to hire subcontractors, most of which are small businesses.”

Under the new rule, essential terms and conditions of employment are defined as:

The final rule rescinds and replaces the 2020 rule that took effect on April 27, 2020. ABC supported the 2020 joint employer rule.