SCMP Breaking News - Labor & Employment
Year 8, Vol. 9 - October 30, 2023
On October 26, 2023, the National Labor Relations Board (“NLRB”) issued a Final Rule broadening the standard for when two employers are considered joint employers under the National Labor Relations Act (“NLRA”).
This new Rule replaces the prior rule established on April 27, 2020. Under the 2020 rule, an employer could be considered a joint employer of another entity only if it had direct and immediate control that had a regular or continuous consequential effect on another employer’s employees’ essential terms and conditions of employment, such as wages, benefits, work hours, hiring, discharge, discipline, supervision, and direction.
The new standard considers the alleged joint employers’ authority to control one or more essential terms and conditions of employment, regardless of whether such control is exercised and regardless of whether the exercise of such control is direct or indirect.
Essential terms and conditions of employment, are defined as:
wages, benefits, and other compensation;
hours of work and scheduling;
the assignment of duties to be performed;
the supervision of the performance of duties;
work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
the tenure of employment, including hiring and discharge; and
working conditions related to the safety and health of employees.
Under the 2023 Rule, if two employers are considered joint employers, they:
both must bargain with the union that represents the jointly employed workers;
both are potentially liable for the unfair labor practices committed by the other; and
both are subject to union picketing or other economic pressure if there is a labor dispute.
How does this Rule Impact your Business?
Employers should be cognizant of the risks involved in maintaining joint payroll systems and/or departments and joint human resources departments for more than one franchise or company.
Employers should avoid having joint decision-makers and/or processes for employees of different stores, franchises or entities.
SCMP will continue to monitor developments regarding this important article and will provide updates in our newsletter as new information becomes available.
Should you require further advice or assistance in relation to this matter, please contact us at (787) 945-0380.
Because of the general nature of this newsletter, nothing herein should be construed as legal advice or a legal opinion. SCMP Breaking News and all its content is property of Silva-Cofresí, Manzano & Padró, LLC
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