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New Joint Employer Rule Delayed Indefinitely

On March 8, 2024, a federal district court struck down the NLRB’s regulations regarding the new standard for determining joint employer status (published in October 2023). This means that joint-employer status will, for the time being, be determined under the regulations adopted by the NLRB in 2020 (the “Substantial Direct and Immediate Control” test). To be a joint employer under the “Substantial Direct and Immediate Control” test, a business must possess and actually exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees.

Under the 2023 joint employer standard, which would have been effective on March 11, 2024 if not for the district court’s March 8 ruling, an entity would be considered a joint employer of another employer’s employees if it possesses the authority to control or exercises the power to control one or more essential terms and conditions of employment. Under this rule, an entity could be considered an employer even if it did not actually exercise such direct and immediate control.

The NLRB will likely appeal the district court’s decision. We will update you as the legal process continues to develop.