If your company engages with contractors to perform services you may think are completely unrelated to your business at first glance…beware. It will soon be more likely that the National Labor Relations Board (“NLRB”) will deem the s employees to be yours. For years, political interests have created a pendulum where the government seems to encourage the use of independent contractors, or severely scrutinize it to reduce contractor status. The pendulum is indeed swinging back again.
After many years of following a single standard for determining joint employer status, the NLRB established a new and restrictive standard in 2015 with the Browning-Ferris case. In Browning-Ferris, the Board held that a company could be deemed the joint employer of its contractor’s employees even if it did not exercise direct or immediate control over those employees. For the Board in Browning-Ferris, the mere “possibility” that the company “could” exercise that control was enough to make it an “employer” for all purposes under the NLRA.
Just a few years later, the NLRB (with a drastically different composition) severely diminished the Browning-Ferris standard. Under the new rule, a company could only be deemed joint employer of its contractor’s employees if it actually possessed or actually exercised direct and immediate control over their terms or conditions of employment.
Don’t get too comfortable with that relaxed standard. The NLRB released its rulemaking priorities for the rest of 2022, and clearly indicated that joint employer status will receive heightened emphasis. It is very likely that we will soon be headed back to the Browning-Ferris standard at the very least, and even possibly a more stringent rule to be set by the Board’s rulemaking authority.