The National Labor Relations Board (NLRB) recently announced a proposed rule that would change the standard for determining when companies may be held liable for labor law violations committed by subcontractors. SMACNA’s Labor Relations Department is in the process of reviewing the proposed rule to determine whether to comment, and will provide additional information when a final rule is issued.
Under the proposed rule, to be considered a joint-employer, a company would have to possess and exercise “substantial, direct, and immediate control” over the hiring, firing, discipline, supervision, and direction of another firm’s employees. The rule further states that control can't be limited or routine.
The proposed rule, announced on Sept. 13, 2018, is a shift away from the prior “employee-friendly” standard where the primary inquiry is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees, regardless of whether the company has in fact exercised such authority.
Notably, the Board’s proposed rule clarifies that an assumed joint-employer “must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”
Additionally, the Board is “presently inclined to find, consistent with prior Board cases, that even a putative joint-employer’s ‘direct and immediate’ control over employment terms may not give rise to a joint-employer relationship where that control is too limited in scope.”
The public is invited to comment on the proposed rule through Nov.13, 2018. Members can read about the proposed rule on the NLRB website at www.nlrb.gov/news-outreach.