Over an impassioned dissent by two of its five members, the National Labor Relations Board has jettisoned several decades of precedent and imposed a new standard for determining when a business will be considered a “joint employer” of the employees of a contractor that provides labor services. Under the previous standard, a business would have to exercise “direct and immediate control” over the contractor’s workers to be considered a joint employer. The new test focuses more on whether the business has the potential to exercise control over workers’ wages and working conditions, even if that control for the most part is not exercised. The NLRB justifies its new standard on the basis that the previous standard was “increasingly out of step with changing economic circumstances,” and did not sufficiently account for the true economic power in these relationships.
Controversial NLRB ruling could reshape widely used business models
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