A Texas district court judge has postponed the effective date of the National Labor Relations Board’s (NLRB’s) joint employer rule by two weeks, shifting it from February 26, 2024, to March 11, 2024. This move has created heated discussions and raised questions about its potential implications across various industries.
Unpacking The New Rule’s Far-Reaching Standard
The NLRB’s joint employer rule introduces an expansive standard, requiring that companies should be considered joint employers of contract and franchise workers. This will require them to engage in collective bargaining with unions if they exert control over critical working conditions such as pay, scheduling, discipline, and supervision, regardless of the nature of this control – whether direct, indirect, or unexercised.
In response to the delay, the court indicated that “an opinion with the court’s reasoning will be issued forthwith.” This decision came on the heels of a lawsuit filed by the U.S. Chamber of Commerce and other business groups. They claimed that the rule runs against federal law and could disrupt numerous industries reliant on temporary and contract labor.
Potential Implications Of The New Rule
The implementation of the broader standard under the new rule has sparked concerns about its potential to significantly impact the franchise industry and disrupt business-to-business arrangements for outsourced labor. Critics of the rule caution that its expanded scope could potentially unsettle established business practices and lead to operational challenges for various industries.
Previous Delays
It’s important to note this delay isn’t the first for the NLRB’s joint employer rule. Initially slated to take effect on December 26, 2023, it was then rescheduled to February 26, 2024, following the Government Accountability Office’s determination that the original effective date violated the Congressional Review Act. In addition, the U.S. House of Representatives passed a proposal in January to overturn the rule, which is currently awaiting consideration by the Senate. President Joe Biden has made it clear that he will veto the resolution if it gains approval in both houses of Congress.
Considerations For Business Owners
With the potential enactment of the NLRB’s new joint employer rule pending, businesses must evaluate their contractual and operational landscapes. The pivotal question for businesses to think about is whether they anticipate the need to control another employer’s workers. Depending on their assessment, they may need to re-evaluate their contracts, policies, and practices to ensure alignment with the new rule or consider adjustments to sidestep a joint employer relationship.
Leveraging HR Expertise And Compliance Support
As we navigate this uncertain regulatory terrain, businesses might find reassurance in considering alternative solutions to address the potential impacts of the NLRB’s joint employer rule. Partnering with a professional employer organization (PEO) like GMS could offer a valuable advantage, providing access to HR expertise, compliance support, and tailored employment practices. By partnering with a PEO, businesses can strengthen their position in the face of regulatory changes, gain valuable insights, and ensure their workforce management strategies remain adaptable and compliant, regardless of the outcome of the NLRB’s joint employer rule. Contact our HR experts today to learn more.