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NBOA Alert: Joint Employer Rule Overturned

By Net Assets posted 12-18-2017 01:27 PM

  
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Human Resources |

Note: On February 26, 2018, the National Labor Relations Board reinstated the Obama-era decision on joint employment and the ruling described below has been vacated. 

The National Labor Relations Board last week overturned a 2015 ruling that held that two entities could be considered joint employers if they had “indirect” control over the terms and conditions of employment or “reserved authority to do so.” Overturning an Obama-era decision for the third time, the board made clear in the new ruling that a joint employer relationship exists only if there is proof that one entity routinely exercised direct and immediate control over essential employment terms of another entity. For schools, the new ruling limits the potential that workers provided by vendors, such as food service providers, will be considered employees of the school. 

As explained in this Net Assets article in September, joint employment exists when an individual works for two or more employers such that they are responsible to the worker, individually and jointly, for compliance with federal and state employment laws. Common examples include a bus driver or nurse shared by two schools. The new ruling makes it less likely that schools will be considered joint employers. Even so, they should exercise caution in matters such as controlling terms and conditions of employment (i.e., directly managing, being able to hire or fire, and exercising day-to-day control over the manner in which they perform their jobs).

NLRB statement on the ruling

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